Higher AU Skin Prices in 2010

Australian lambskin prices throughout 2010 have been exceptionally strong, exceeding the five-year monthly averages by between 25 percent and 77 percent, according to Meat and Livestock Australia's (MLA) average weekly prices. Tighter supplies and firm international demand have been the main factors driving the dearer market.

Higher prime lamb prices and the favorable season in Australia's eastern states have encouraged retention of sheep and reduced mutton slaughter, leading to a significant shortfall in Merino sheepskins. As a result, Merino sheepskin prices have been a standout in 2010, as average monthly prices have remained above $12 per skin, after prices peaked at around $20 per skin. The stronger sheepskin prices have played a role in lifting producers' bottom lines - skin prices for medium-weight ewes with plenty of wool often contributed up to 20 percent of the animal's market value.

The U.S. pelt market relies heavily upon relative exchange rates for its competitiveness, according to the market report published in the American Sheep Industry Association's Sheep Industry News. The weak U.S. dollar likely supported recent pelt price runs, with highs that have not been seen since 2005.

Reprinted in part from Meat & Livestock Australia