The level of sheep production in Australia continues to reach new heights, setting new records on a continual basis.

Meat and Livestock Australia (MLA) reports in its latest market update that the most recent sheep kill increased by a massive 125,918 head to reach 692,682 sheep.

The adult sheep kill of 221,623 head represented a 46% increase following the Easter break and set a new record for adult sheep throughput. Lamb slaughter also increased in all bar one state, with year-to-date slaughter increasing by 210,560.

Light lamb challenges

The light lamb market (12kg to 20kg) has been facing increasingly challenging market conditions in recent weeks.

A combination of lower farmgate prices and tight feed availability, influenced in some areas by drought, has greatly curtailed optimism in finishing lambs.

The latest light lamb price indicator declined by 91c/kg to $4.86/kg or the equivalent of €2.92/kg.

MLA market information analyst Emily Tan reports that conflict in the Middle East and recent floods in Dubai has "impacted logistics and transportation costs as the majority of light lambs are destined for the Middle East”.

The fact that processors are reported as almost close to capacity is also reducing demand for light lambs.

The heavy lamb price indicator is currently averaging $6.49/kg (€3.91/kg). The differential between the heavy and light lamb trade is now running in the region of $1.62/kg, the largest it has been for quite some time.