THE run of high sheep prices has continued unabated with wethers making up to $115 at the Katanning trade sale last week and $117.50 for black tag wethers at this week's Midland sale. Heavy prime lambs sold between $115 to $140 at both Midland and Katanning, while heavy mutton recorded values between $65-$85. Rams sold to a top of $154.

Again live exporters needing to fill orders helped push prices up.

This comes just a week after prices were sent through the roof in New South Wales, with prime lambs topping $188. The question on everyone's lips is are these prices sustainable?

Meat and Livestock Australia (MLA) said Saudi buyers are looking to South America as sheep numbers in Australia contract, with a 1.8 per cent fall in inputs resulting in a 1.4pc fall in output.

In the last financial year the number of sheep and lambs slaughtered, live exports and deaths have exceeded the number of lambs marked.

The lambs sold over the hooks has also increased from less than 5pc of lambs sold in the early 1990s to around one-third of lamb sales in 2007 to 2008 season.

On top of this mutton production in WA has dropped back by 33pc on last year's figures.

Both exporters and processors agreed after the recent Katanning June Special sale that these high prices are not sustainable, yet week after week prices remain high and industry experts are still urging growers to maintain their nucleus flock.

MLA sheepmeat analyst Kara Jones said low national sheep numbers were pushing prices up around the world.

"The lower flock numbers, tight sheep and lamb supply and firm export demand has seen record pieces at the saleyards," Ms Jones said.

"With tighter numbers and fears of a shortage prices are rising and demand is holding up.

"The flock needs to remain large enough to produce prime lambs and Merino lambs for the wool industry.

"If we do not have enough ewes Australia will not be able to meet future demand."

See full report in this week's Farm Weekly.