Mutton prices reach 16-year low

The indicator fell to 98c on Wednesday but on Thursday rebounded to 105c following a stronger sale at Wagga Wagga, where prices jumped up 40c and pulled the indicator back up.

Meat & Livestock Australia market information manager Stephen Bignell said supply remained a major driver in the downward pricing pressure, with throughput in the indicator up by 15 per cent compared to the same time a year ago.

"When we go back and look at historical prices, November 29, 2007 is the last time the indicator got so low," he said.

"Cootamundra and Wagga Wagga were the best and Warwick and Katanning were both under 60c.

"The best prices were in Cootamundra, Wagga Wagga, Inverell and Yass.

"The big discount, and what's driving the indicator lower is those 14-18kg animals... they're making around 13pc of the indicator and they're going for a big 25pc discount."

Wagga Wagga, Dubbo and Forbes, all of which are performing above the national average, are currently making up a combined 40pc of the indicator throughput.

"If you stripped them out, it could be a different picture," Mr Bignell said.

NSW is currently receiving a 6pc premium for mutton, fetching an average 111c while Victoria is receiving 104c.

South Australian mutton is commanding an average 80c, a 22pc discount, while WA is going at 14pc discount at an average price of 87c.

Within Western Australia, mutton going through Katanning is receiving a 41pc discount compared to Muchea, which now has 69pc of the throughput for the state.

"One of the things that would definitely be of a concern to a producer, say they're targeting trade lamb or maybe even heavy, there's a drop from $4.30 to $1.05 if your animal has cut teeth," he said.

"That's a $3.35 per kilo discount... if you had old lambs, you would be stressing.

"You wouldn't want your lambs to cut teeth at the moment."

MLA will put out its latest Sheep Producer Intentions Survey on October 2 and Mr Bignell said it was important that as many producers responded as possible.

"The survey tracks sentiment and sentiment will be down, we want to get as many participants as possible as that will tell us where lamb sales are and where sentiment is at, which helps industry," he said.

"I know producers may not be feeling stoked about it, but the more that can fill in that survey, it would really be beneficial."