MOST producers expect a drop in supply of slaughter lambs this autumn and winter due to high kill rates and reduced restocker activity.
Yet the supply forecast by Meat and Livestock Australia, which last week released its market outlook for lamb for this year, is for higher lamb kills across every quarter this year.
MLA forecast the lamb kill compared to last year in:
JANUARY to March will reach 5.03 million head - a 7.6 per cent increase on the same period last year.
APRIL to June will total 5.01 million head - a 1.2 per cent increase.
JULY to September to reach 5.2 million head - a 3.3 per cent increase.
OCTOBER to December is expected to total 5.5 million head - a 0.9 per cent increase.
Such an outlook raises questions about the ability of the market to deliver much of a price premium over the colder months. Especially as the demise of lamb values last winter was linked to bigger-than-anticipated supplies and what is being suggested now is bigger numbers again.
There is always, however, grey areas and arguments when it comes to the size of Australia's sheep flock and the potential supply pool of lambs waiting to be sold.
MLA's senior market analyst Tim McRae said they did not dispute the fact less lambs had been sold back to the paddock for further finishing this recent spring and summer.
Indeed MLA's 32-page outlook includes information showing how the level of restocker buying of young lambs at saleyards has tracked below 18 per cent since September - significantly below the levels of 25 per cent-plus recorded over the same period 12-months ago.
However Mr McRae said this had to be balanced against the growth in the sheep flock over the past two very good and wet years.
"We don't expect as many lambs to have gone back to paddocks and to come into the system again, but there are indications from more ewes and lambs on the ground over the past couple of years that there will be more lambs available for slaughter throughout this year," he said.
So what does it mean for price?
In its lamb outlook MLA gives a broad guideline that lamb prices this year will average less than last year - which was about 400c/kg carcass weight for trade lambs - but better than the lows of 310-320c/kg recorded pre-Christmas.
To my way of thinking, it doesn't give much confidence of a significant price lift for lamb this winter, which many farmers are hoping for, especially those forced to supplementary feed lambs to hold them for later markets due to the lack of cheaper paddock feed this summer.
The term used by MLA is "potential for a small price rise mid-year before another decline with an expected spring flush".
Mr McRae said predicting prices was difficult, with the season and other factors, such as export demand for lamb and the financial performance of countries such as the US and European Union (key destinations for Australian lamb), having an impact.
He said a likely trend in coming markets could be varied price results due to the poor season affecting lamb quality.
"The possible small price increase would likely be in the late autumn/early winter period, and given the expected rise in production later in the year, it is not likely to remain high for a long time, unless there is an improvement in global lamb and sheepmeat demand or we see a significant improvement in the season," Mr McRae said.