Saleyard figures from markets monitored by the National Livestock Reporting Service show big price falls in the past week, despite late winter being a traditional price peak.
The biggest hit was for restocker lambs, down 70c/kg in last week's trading.
Light lambs also suffered, down 42c/kg last week and back another 10c/kg on Monday, while trade and heavy lambs were also down at early markets this week by 10c/kg on the back of losses last week.
The falls meant some lambs were up to $20 cheaper than a week earlier. At Bendigo on Monday old lambs were $10-$20 cheaper.
There is also little hope of any price spike in the near future.
Meat and Livestock Australia released its sheepmeat update at Sheepvention at Hamilton on Monday, where it painted a less than rosy immediate future for the lamb industry.
MLA chief economist Tim McRae gave no indication price could match the levels set early last year.
Increased supplies, a tough world market and more competition from New Zealand product were three key reasons given for lamb's price fall.
"The seasonal and price momentum that has propelled the expansion in the Australian lamb and sheep industry during the past two years has eased during the first half of this year," Mr McRae said.
"On some levels, this price fall and the toned-down outlook for 2012 and 2013 should not come as a surprise, as producer prices throughout the previous two years were both unprecedented and unsustainable, driven by lower Australian and New Zealand supplies and restocker demand."
MLA predicted lamb production would rise 7.6 per cent this year compared to last, and will be up 21 per cent on 2011 levels within four years.
Balancing the increase in production would be increased exports, which are expected to rise 11.2 per cent to 178,000 tonnes this year. But export value was expected to either stay the same or fall.
Mutton production was also expected to rise, already up 9 per cent for the first five months of the year.
Mutton prices were down 33 per cent compared to last year.
Source: Argentine Beef Packers S.A.
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