What's going on?

Australian farmers have lost count of their sheep, and not because they’re trying to nod off.

What does this mean?

Australian sheep have been living lives of luxury for the last three years, gorging themselves on plentiful, hydrated, and simply delicious grass thanks to unusually heavy rainfall. But they’re in for a rude awakening now. Healthier animals mean more successful breeding seasons, and all that romance means farmers across the country now own more sheep than they can handle. And while many farms are offering to give their animals away for free, it seems there aren’t many folk in the market for unconventional pets. That means there’s plenty of – look away now, animal lovers – meat in the market, and that excessive stock has driven prices down 70% over the past year. Sunday dinners are cheaper now, sure, but spare a thought for the country’s skittish, sleepless sheep.

Why should I care?

For markets: Gold, bonds, and pork.
Protein matters, and not just at the gym. China has shown us just how much meat prices count when it comes to inflation: “porkflation” hit in 2020 and 2022, when the country’s favorite meat became more expensive than ever, running up the cost of grocery lists. And when pork prices let up, inflation did too – so much so that China’s now bracing itself for deflation. The government even started stockpiling pork meat to prop up prices, accidentally creating the world’s saltiest snack drawer in the process. 

The bigger picture: From mutton to mealworms.
As countries get richer, they want more meat on their plates. That’s why the world now produces three times as much meat as it did 50 years ago. But with climate change and deforestation wreaking havoc on land and water, farmers may struggle to ramp up production at that same pace. So make the most of cheap Australian mutton and Chinese pork while you can, because the future may be full of vegetables and insects.