The lamb market is battling to hold its ground; supported by limited supplies of heavy export and supermarket lambs and solid US export demand, but under pressure from large supplies of store and lighter trade lambs, disruptions to the Middle Eastern (ME) trade and a pullback in buying from China and ME that typically operate in this market.
Lamb slaughter remains +50,000 to 100,000 head/week or 25 per cent (pc) above the 5 year average. Supplies should start to moderate a little moving into winter, but spring supplies loom large and will prove another test for this market.
This chart shows the national weekly lamb slaughter vs last year and the 5 year average.
Trade lamb indicator c/kg lw
| 16 May | +/- week | +/- month | +/- year | |
| AUST | 649 | - 31 | + 2 | + 8 |
| QLD | 630 | + 135 | + 98 | - 26 |
| NSW | 667 | - 35 | + 11 | + 33 |
| VIC | 633 | - 23 | - 11 | - 27 |
| SA | 628 | + 12 | + 19 | - 40 |
| TAS | 576 | - 85 | - 39 | - 106 |
| WA | 462 | - 12 | - 42 | - 39 |
The table shows the trade weight lamb saleyard indicator price for each state against last week, last month and last year. Source: MLA
This chart shows the national saleyard indicator price for trade weight lambs vs the number of lambs included in the calculation (proxy for saleyard yardings in this category).
There is reasonable demand for heavier trade weights around 24 kg dressed, but the tough spring has pushed supplies back around 6 weeks. Graziers without fodder crops or access to grain are finding it hard to get to these weights and are quitting stock, putting pressure on the forward store and light trade lamb market. It hasn’t helped that the Chinese and ME market that normally takes these lighter lambs has gone off the boil.
This chart show the Australian saleyard indicator price of heavy export weight lambs vs the price of Australian boneless lamb legs in the US market.
In comparison to the lighter style lambs that have displayed some volatility through autumn so far, the US market has been solid. Prices for Australian lamb to the US peaked around Greek Easter and have come off a little but processors report that demand remains solid, particularly in comparison to Chinese demand.
The tough spring endured by many lamb production areas has limited supply of heavy weight lambs which should assist prices into winter. Lambs going on feed now will take another 4 to 6 weeks to get to the heavier weights with winter conditions working against producers.
Heavy lamb indicator c/kg lw
| 16 May | +/- week | +/- month | +/- year | |
| NSW | 683 | - 12 | + 35 | + 20 |
| VIC | 652 | - 18 | - 20 | - 24 |
| SA | 612 | - 31 | - 38 | + 22 |
The table shows the heavy weight lamb saleyard indicator price for each state against last week, last month and last year. Source: MLA
Restocker lamb prices are being supported by the heavy discount to heavy weights which has crept back over $100/head since mid-April. The cost of feeding restocker lambs is currently estimated at around $60 to $70/head. While the margin to heavy lambs remains over $100/head, restockers lambs should good support. Certainly, MLA is noting activity in southern market by feeders but caution that they are wary about bidding too high or competing full supply against processors.
This chart shows the difference in the Australian saleyard indicator price for heavy export weight lambs vs restocker lambs.
This chart shows the Australian saleyard indicator price of restocker lambs.
Restocker lamb indicator c/kg lw
| 16 May | +/- week | +/- month | +/- year | |
| AUS | 528 | + 29 | - 6 | + 56 |
| NSW | 609 | + 28 | + 19 | + 79 |
| VIC | 602 | + 51 | + 48 | + 29 |
| SA | 483 | + 19 | - 57 | - 17 |
| TAS | 406 | + 66 | - 109 | -170 |
| WA | 270 | + 45 | + 16 | + 43 |
The table shows the restocker lamb saleyard indicator price for each state against last week, last month and last year. Source: MLA
Sheep processors compete hard for stock before supplies ease
Mutton prices have firmed since mid-April, despite supplies remaining well above year ago levels, up 14 pc and a whopping 40 pc above the 5-year average, driven by high slaughter rates in WA, VIC and NSW.
It could be a case of the cheaper proteins attracting demand as consumers tighten expenditure on food. Mutton is around half the cost of lamb. The light mutton bag trade to Malaysia is the best it has been for 5 years, the Middle East is buying consistently, but the boneless mutton trade into China has slowed amid large stocks in cold storage.
Mutton values should remain firm as supplies ease as we head towards winter. Already processors are reporting some difficulty in sourcing heavy sheep. The kick in the market this week is mainly a result of processors needing to filling kill schedules due to cancelled bookings out of western NSW & QLD due to rain last week.
This chart shows the national saleyard indicator price for mutton vs the number of sheep included in the calculation (proxy for saleyard yardings in this category).
This chart shows the national weekly sheep slaughter vs last year and the 5 year average.
Sheep indicator c/kg lw
| 16 May | +/- week | +/- month | +/- year | |
| QLD | 265 | + 57 | - 70 | + 83 |
| NSW | 319 | + 27 | + 43 | - 58 |
| VIC | 307 | + 52 | -+ 25 | - 27 |
| SA | 257 | + 15 | + 66 | - 96 |
| TAS | 237 | + 37 | + 32 | - 86 |
| WA | 135 | + 29 | + 53 | - 129 |
The table shows the sheep saleyard indicator price for each state against last week, last month and last year. Source: MLA.
Sources: Price data reproduced courtesy of Meat & Livestock Australia Limited.
The information contained in this article is given for the purpose of providing general information only, and while Elders has exercised reasonable care, skill and diligence in its preparation, many factors (including environmental and seasonal) can impact its accuracy and currency. Accordingly, the information should not be relied upon under any circumstances and Elders assumes no liability for any loss consequently suffered. If you would like to speak to someone for tailored advice relating to any of the matters referred to in this article, please contact Elders.