Last week, the Eastern Trade Lamb Indicator closed at 501 cents a kilogram or 24 per cent higher than the previous January record in 2004.

The Meat and Livestock Australia’s (MLA) National Livestock Reporting Service is reporting that prices across all national lamb categories are well up on last year by between 22pc for heavy lambs and 34pc for restockers.

According to MLA, lamb demand remained intense from processors, live exporters, feeders and restockers, driven by strong local and overseas interest.

Similarly, mutton sheep prices hit a record of 326 cents a kilogram (cwt) last week, driven by strong Middle East sheepmeat and live sheep demand, restocker demand and a 20pc year-on-year fall in yardings.

Rabobank senior rural manager Michael White would not be drawn on whether the sheep industry was the most profitable Australian agricultural industry, but said on a profit per hectare basis the industry “stacked up well".

“The critical factors for profit always come down to; economies of scale, efficiencies of scale and low cost basis.”

He said Rabobank forecast sheep and lamb prices to remain strong, driven by diminished international flocks that helped drive Australian export demand.

This year’s Industry and Investment NSW analysis, based on figures from south east NSW report a self replacing Merino ewe (21 micron) mated for prime lamb operation returned a gross margin per hectare of $309.57, Merino ewes (19 micron) mated for Merino lambs at $283 GM/ha, and Merino wethers (19 microns) $233 GM/ha.

In contrast the report identified cattle yearling production at $170.60 GM/ha and wheat production at $115 GM/ha (assuming a 2.5 tonne per hectare yield and on farm price of $181 per tonne).

As for the golden era, Mr White said: “Potentially we are in for a very good era.”