Positive signs this month as tariffs uncertainty is removed and supply shows signs of easing.
Key points:
- Sheepmeat markets have been held back by high sheep slaughter for most of this year
- Uncertainty around tariff levels have kept heavy export lamb markets in check over their peak demand period ahead of US Greek Easter
- Strong demand from the Middle East bag trade over Ramadan has meant light lambs have traded a premium over stores, meaning not as many have been going to feeders
- Expectation of a hole in lamb and sheep supplies over late autumn and winter due to heavy ewe kill past two years
- Sheep prices rocketing as supply shows signs of easing
- Heavy export lamb prices should now start trading higher now that tariff uncertainty has been removed and because of pent-up demand, as export trade in recent weeks has come to a standstill
- Restocker premium over light lamb return as confidence improves.
Sheep slaughter remains huge
The sheepmeat market has been weighed down by heavy slaughter rates ever since the spring of 2023 when the southern season failed, and prices crashed as processors gearing up after COVID couldn’t handle the supplies thrown at them.
This experience and the ongoing mixed seasonal conditions across large lamb and sheep producing areas of southern Australia, combined with the impending phase out of the live sheep trade in Western Australia has seen farmers downsize sheep flocks adding to sheepmeat supplies.
As shown in the chart opposite, combined sheepmeat slaughter is up 5 per cent on last year and 14 per cent on the 7-year average, mainly driven by a 23 per cent lift in the mutton kill year on year.
Chart shows combined lamb and mutton kill 24/25 vs 23/24 and 7year average. Source: MLA
Conservative estimates have ewe numbers back at least 20pc over the past couple of years and this combined with lower lambing percentages has consensus thinking that there will be a hole in sheepmeat supplies sometime in 2025.
This week was the first sign that numbers may be tapering, with most yards reporting lower offerings and mixed quality with good heavy lambs off grain. Most selling well to above $8/kg cw but processors remained selective on weight and type.
With seasonal conditions still tight across most sheepmeat areas and the numbers of good quality types coming off pastures starting to fade, the big question is how many lambs are in feedlots, as without a season break soon, grainfed lamb will provide the bulk of the heavyweights over late autumn/winter.
While prices for lamb have been gently firming, mutton values have exploded, illustrating that there is no problem with global demand for sheepmeat. Rather, that the trade is uncertain about how much they will be able to get for premium cuts that go to the US which adds value to the lamb carcase and allows a premium to be paid for heavy weight lambs.
Doubts about US market keeping export lamb prices in check
Normally at this time of year, with doubts around supply, processors would be actively looking to contract heavy lambs. Processors are still reporting export interest but due to uncertainty around who is going to pay for Trumps 10pc tariffs they are having difficulty pricing lambs forward.
We have heard several forward contracts offered around $8.60-$8.80/kg for May, but some exporters we spoke to said they couldn’t commit to a price above $8/kg because they didn’t know what price they would be selling premium lamb cuts for into the US.
The US market is very important to the lamb industry because it pays a significant premium for high quality lamb cuts such as boneless legs, racks and short-loin well above other higher volume markets such as the Middle-East and China. Being a discretionary item, its uncertain whether the tariff could be passed onto the US consumer without affecting demand and price back to the exporter.
Steiner reports that US lamb imports were off to a strong start in late January but have slowed down ever since. In the four weeks ending 8 March the volume of imports from Australia was 5,285t (-12.7pc) compared to a year ago.
Now that the tariff level has been announced lamb exporters would be negotiating with US importers about who pays the tariff. With lamb a luxury or discretionary spending item passing it directly onto the consumer may not be an option without affecting demand and volume.
By the end of this week, we should have an idea of the longer-term impact of the tariff on the US heavy lamb export market.
So far it seems to be having little impact with local supply and demand considerations the overriding factor with local heavy lamb markets continuing to grind gently higher.
This chart shows the national saleyard indicators prices for heavy lambs this year vs 23/24 & 7year average Source: MLA
Trade lambs
With uncertainty surrounding heavy export lamb prices into the US and producers struggling in many areas to achieve export weights above 30kg cw, the trade lamb market has been relatively well supplied. However, there are signs this market could begin to tighten up after Easter and resume a positive price trend now some of the uncertainty surrounding the export lamb markets has been cleared up.
The generally positive sentiment that was led by heavy export weights flowed into the trade sector with saleyard prices nudging back above $8-8.20/kg cw this week with prices probably helped by slightly lesser offerings with producers nervous about booking lambs due to the pending tariff announcement last Wednesday.
This chart shows the national saleyard indicators prices for trade lambs this year vs 23/24 & 7year average. Source: MLA
Ramadan demand keeps light lamb prices firm despite large supplies
Strong prices for light lamb 14-20kg cw ($130-$150/hd) for the Middle East bag trade has seen a larger than normal number of light store type lambs go straight to slaughter rather than to restockers or feeders. Our agents report that although there are still lambs coming out of the western district due to low water reserves, there are only a few lambs still left to come out of the Wimmera/Mallee, Hay, Swan Hill, Mildura and Ouyen.
Ramadan demand has kept the bottom end of the lamb market firm ($7-7.30/kg cw merino or $8/kg xb cw) 14-20/kg cw and while there are reportedly some strong numbers in private feedlots, there are maybe not as many lambs on feed normal. The performance of the light lamb market has been impressive given the season has seen larger numbers of these types than normal.
One of our WA agents said that they have just seen the first order for chilled air freight lamb into Middle East for a long time. We suspect this is due to Qatar Airlines taking a stake in Virgin. So, there is a processor order out in WA at $6.20/kg cw for lambs 16-28kgs fat score 1 and 2.
The Middle East bag trade will help fill the hole left by the phasing out of the live export trade and help with the WA processing space issue because they want the whole carcase form and don’t need boning, so higher processing throughput can be achieved.
This chart shows the national saleyard indicators prices for light lambs this year vs 23/24 & 7year average. Source: MLA
Feeding lambs now an investment not a cost
Good rain across central and northern NSW and the promise of better returns for finished lambs, now that the US trade situation has been resolved, has revitalised the store lamb market which has fluctuated around last year’s levels.
Also hindering store lamb values has been the premium light lambs have held over restockers for much of the past two seasons. This will disappear with a good autumn break across the south.
This chart shows Light lamb premium over restocker lambs Ac/kg. Source: MLA
Some optimism crept back into the store lamb market last week, but it will be interesting to see if this can be maintained with little sign of a spring break on the horizon. Certainly, the light lamb discount disappeared last week as buyers from areas of northern NSW became more active in the market.
This chart shows the national saleyard indicators prices for restocker lambs this year vs 23/24 & 7year average. Source: MLA
Mutton the star of the show
Finally, producers might be starting to slow down flock liquidation if mutton prices are anything to go by, skyrocketing the past couple of weeks as processors are finally forced to chase a few to fill slaughter schedules. This is very early for prices to start showing winter premium and is related to the heavy sustained turnoff we have witnessed the last few years.
Grid prices across south-east South Australia rocketed to $6-$7/kg cw as processors there know they are running out of killable stock.
As one agent put it today feeding sheep is now an investment not a cost.
This chart shows the national saleyard indicators prices for mutton this year vs 23/24 & 7year average. Source: MLA
From the rails
Read what Elders livestock representatives from around Australia are saying about the markets in their regions.
Northern Tablelands - hot February sets back smaller crop of New England lambs
"In the Northern Tablelands agents report a tough season with lamb numbers well down due to the poor season in 2023 and tough seasonal conditions at joining again in 2024. February sown fodder crops didn’t come away due to the heat. Many had to be resown on March rain and are now going gangbusters. Lambs are now moving onto crops but like last season, they will be around three months behind."
"Lambs sold from the New England direct to works over the past few months were hammered by the hot February, resulting in poor yields as low as 43per cent (pc) so $7.50-$8.20/kg cw prices didn’t work out well on a per head basis. It’s hoped that the next lot of lambs going onto crop now and contracted at $8.80/kg cw to be turned off in Jun/Jul will provide better results.
"There has almost been no interest in purchasing first cross replacement ewes. Normally our agent sources large-framed ewes from Narromine but for the second year in a row buying has been well down with only around five small orders about 1/3 of normal. Northern tableland producers continue to shift into cattle." - Mark Atkin, Branch Manager, Northern NSW, Guyra/Armidale
Central West - rain and uncertainty shrink numbers and lift prices
"In the Central West, Dubbo numbers were well off this week, with good rains around and a bit of nervousness about the US tariff situation. Yardings were down by around 2/3rds to 6,000 and prices pinged $30/head. Our agent there has done well bringing hoggets down from western Queensland and has also been active in buying restocker lambs from Nyngan and Yass with Dubbo enjoying a better season than many other areas. But with the good prices for the Middle-East bag trade at $130-150/hd, some producers have been cashing in rather than worrying about selling to restockers or feeding them to supermarket or US export weights.
"We are seeing larger numbers of mutton than usual over the past month, with some sales yarding more mutton than lambs, which is rare for Dubbo. While our season had eased recently due to a hot, dry February, fortunately over the past week we have experienced falls from 40-80mm which has got us right back on track with our season." - Jake Lebrocque, Territory Sales Manager, Forbes.
Central Tablelands- prices move higher in mixed quality offerings
"With the season tightening up a little across the Central Tablelands – most areas are waiting for a follow-up rain to put some vigour into fodder crops to get some growth before winter, offerings have been starting to taper off along with quality.
"Nonetheless in an indication of concern about future supplies, prices were dearer across the board this week with light lambs up to 18kgs firm at $110-145/hd, trade types $9/hd dearer $162-$218/hd and heavy weights $10/hd higher $213-283/hd working out at $8.50-8.80/kg.
"Sheep were most sought after in a mixed quality offering up $20-25/hd working out at between $4.80-$5.60/kg cw, which is getting up there and about the best prices since the end of 2022. - Ben Emms, Livestock Mgr Emms Mooney Blayney.
| NSW sheepmeat saleyard indicatorsc/kg dw | ||||
| 7 April 25 | +/- week | +/- month | +/- year | |
| Lambs | ||||
| Heavy | 824 | 804 (+20) | 817 (+7) | 669 (+155) |
| Trade | 823 | 809 (+14) | 802 (+21) | 658 (165) |
| Light | 788 | 723 (+65) | 738 (+50) | 605 (+183) |
| Restocker | 820 | 745 (+75) | 761 (+59) | 618 (+202) |
| Mutton | 610 | 480 (+130) | 396 (+214) | 313 (+297) |
Source: MLA
Western District running out of stock water keeps lamb numbers moving
"One of our agents who looks after a big chunk of western Victoria travelled from Bendigo to Gippsland, Skipton and out to Cobar in the past week, looking to buy lambs and reported tight conditions all the way and not many sheep or lambs. He reckons scanning rates in his main area around Bendigo were okay at 95-97per cent (pc) wet with many twins and triplets.
"Ramadan demand has kept the bottom end of his market firm ($7-7.30/kg merino or $8/kg xb) 14-20/kg cw. He also has a few private feedlots who have lambs on feed, but not as many as normal.
"Anything 22kg plus he can get $8-8.40/kg cw, which is ok but not the heady heights of pre-Christmas and a bit lower than what they normally get to over peak US demand period in the lead-up to Greek Easter. He reckons most of his clients would be down 20pc in ewe numbers the past couple of years and he can’t sell a first cross ewe lamb to restockers having offered multiple lots at $160/hd on AuctionsPlus with no interest. Things have picked up a little after the rain though, but restocking interest is still lacklustre at best." - Nigel Starick, Livestock Manager, Bendigo.
| Victorian sheepmeat saleyard indicators c/kg dw | ||||
| 7 April 25 | +/- week | +/- month | +/- year | |
| Lambs | ||||
| Heavy | 815 | 807 (+8) | 797 (+18) | 667 (+148) |
| Trade | 802 | 782 (+20) | 785 (+17) | 649 (+153) |
| Light | 764 | 758 (+6) | 798 (-34) | 639 (+125) |
| Restocker | 814 | 771 (+43) | 794 (+20) | 640 (+174) |
| Mutton | 524 | 508 (+16) | 404 (+120) | 296 (+228) |
Source: MLA
South Australia - plenty of supplementary feeding going on
"Our agents in South Australia are cleaning up the last lines of lambs, with some coming out of feedlots. There is strong demand for sheep of all weights that sold either side of $6-$7/kg cw, with heavier weights getting the best money. Plenty of supplementary feeding going on in areas that have started lambing. In other areas, ewes are being scanned with any dry’s being offloaded immediately. Some clients are deciding whether to sell ewe lambs or feed on for the off shears markets when supplies are expected to tighten later in the year.
"Some good results at Ouyen sale this week with prices up to $8/kg for merino lambs and $8-8.40/kg for fresh trade and heavy trade crossbreds. Heavy export lambs plus 30kg worked back to $7.60-7.80/kg cw.
"Ewes scanned in lamb to British breeds across SA have moved upwards from $120-140/hd a month ago to $160-180/hd depending on age, finding new homes in the lower south-east, parts of Victoria and southern NSW.
"While there are some forward contracts available, processors are reluctant to commit to anything much above current pricing levels until they know what’s going to happen with tariffs into the US this week." - Damien Webb, State Livestock Manager SA (North)
| SA sheepmeat saleyard indicators c/kg dw | ||||
| 7 April 25 | +/- week | +/- month | +/- year | |
| Lambs | ||||
| Heavy | 794 | 794 (n/c) | 765 (+29) | 656 (+138) |
| Trade | 784 | 784 (n/c) | 748 (+36) | 639 (+145) |
| Light | 704 | 704 (n/c) | 756 (-52) | 554 (+154) |
| Restocker | 708 | 708 (n/c) | 604 (+104) | 480 (+228) |
| Mutton | 551 | 471 (+80) | 383 (+168) | 297 (+254) |
Source: MLA
Western Australia processing space still the issue
"Not a lot of change in the Western Australian market, bar the mutton side, which has kicked Australia wide. Lambs still sitting at $7.40/kg cw. Mutton is $3.80-3.90/kg cw with quite a bit of interest coming from the east with mutton there heading to over $5/kg cw. Our agents are looking for at least another 20-30c/kg cw to make it a bit more attractive to truck sheep across the border with current freight costs.
"Delivery for the last export boat for the season will be around 24 April. That'll be about 120,000-130,000 sheep removed from the state through April, so that will help.
"What's not going to help the lamb job is finding processing space prior to Easter, with all the public holidays. Plus, one of the major WA abattoirs had a breakdown during the week, which kept them closed for two days.
"Elders has its feeder lamb sale this Friday on AuctionsPlus. There are around 10,000 head pencilled in with strong interest from feedlotters. Seems like some of the processors with feedlots have cleared a bit of space and want to fill up yards again.
"Due to the dry and lack of other options there is still a lot of lambs on feed, lambs that would normally be fed for four weeks have been on feed for seven or eight weeks now with weights starting to blow out.
"Processing space is still difficult to find especially for the bigger feedlotters who have 30,000 or 40,000 head and normally contract to processors at 54kgs. But because they can't get any large volume killed, they are tipping them out closer to 60kgs.
"A buyer from over east can handle them on a week's notice, but the problem is he's only offering a $7.60/kg cw, so by the time we freight them, its back to the high $6/kg cw mark and you lose yield. So it’s not ideal.
"WA producers are faced with a double whammy as the livesheep trade ends and Qatar stop flying out of Perth, putting pay to our Middle-East bag trade which was a valuable outlet for lamb. Previously we could do nine tonne containers of chilled lamb and we had a freight advantage over east coast due to proximity. We can’t compete on freight now. That bag trade would have helped filled in the hole left by the live export and helped with the processing space issue because they went in whole carcase form and didn’t need boning so you could process them quicker.
"But interestingly, our agents say that have just seen the first order for chilled air freight lamb into Middle east for a long time, we suspect due to Qatar airlines taking a stake in Virgin. So, there is a processor order out at $6.20/kg cw for lambs 16-28kgs fat score 1&2.
"Interestingly one of my industry contacts said that the cost of live sheep transport is now around $250/hd due to increased regulation and lower shipping capacity which they have cut from 80,000-100,000 to 60,000 head. Regulation has priced live sheep out of the market." - Wayne Peake, Livestock Manager WA
| WA sheepmeat saleyard indicators c/kg dw | ||||
| 7 April 25 | +/- week | +/- month | +/- year | |
| Lambs | ||||
| Trade | 641 | 642 (-1) | 594 (+47) | 441 (+200) |
| Light | 449 | 520 (-71) | 491 (-42) | 358 (+91) |
| Restocker | 489 | 528 (-39) | 432 (+57) | 256 (+233) |
| Mutton | 347 | 367 (-20) | 258(+89) | 73 (+274) |
Source: MLA
Tasmania looking for rain before it gets too cold
"Over in Tassie there has been no rain of any of note over the last few weeks. They need rain soon as within a month or so it'll get cold and there won't be a lot of growth.
"The Tasmanian sheepmeat job is relatively steady. Local trade lambs are sitting around $7.40/kg cw and a bit of forward interest around $8/kg cw.
"Middle-East bag trade lambs tops around $7.40/kg cw. The physical market is probably the place to be, anywhere from $7.60-7.90/kg cw seems to be about the mark.
"And the mutton job over here is solid. Good competition after the better-quality heavier types anywhere from $4.60 up to $5/kg/cw." - Gavin Coombe, State Livestock Manager, Tasmania.
| TAS sheepmeat saleyard indicators c/kg dw | ||||
| 7 April 25 | +/- week | +/- month | +/- year | |
| Lambs | ||||
| Trade | 744 | 746 (-2) | 658 (+86) | 492 (+252) |
| Light | 503 | 503 (n/c) | 720 (-217) | 463 (+4) |
| Restocker | 746 | 746 (n/c) | 658 (+88) | 337 (+409) |
| Mutton | 525 | 525 (n/c) | 385 (+140) | 165 (+360) |
Source: MLA
Stock losses the focus for western Queensland sheep producers
"Working our way around the country, our agents in western Queensland said their clients received anywhere from 120-640mm of rain and have a huge cleanup in front of them with major damage to transport and infrastructure."
"Although assessments are still being made, the western Queensland flock may be 25-30 per cent (pc) down due to flood losses, with some producers losing up to 50-80pc. What sheep do survive be well down in weight and scanning percentages (50-65pc) will be low because of the season. Prior to rain the season was very tight season with ground water issues.
"Merino sheep have been on a decline in the area over the last two years by 10-15pc per year, with exotics replacing half of that decline. The other half just going out of sheep with some generational change.
"Almost 80pc of the numbers sold out of the region go to Wagga or Forbes either to restockers or processors with very little demand from within 800-1000km. But don’t expect too many numbers to come out of this area for a while yet with the focus being on getting operational again. Our hearts go out to those affected with some Elders agents taking time off to help those affected." - Tim Salter, Longreach Branch Manager, Central Queensland Hub
| Queensland sheepmeat saleyard indicators c/kg dw | ||||
| 7 April 25 | +/- week | +/- month | +/- year | |
| Lambs | ||||
| Trade | 654 | 777 (+123) | 700 (-46) | 495 (+159) |
| Light | 577 | 501 (+76) | 604 (-27) | 475 (+102) |
| Restocker | 543 | 608 (-65) | 559 (-19) | 464 (+79) |
| Mutton | 326 | 230 (+96) | 297 (+29) | 179 (+147) |
Source: MLA
Sources: Price data reproduced courtesy of Meat & Livestock Australia Limited.
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The information contained in this article is given for general information purposes only, current at the time of first publication, and does not constitute professional advice. The article has been independently created by a human author using some degree of creativity through consultation with various third-party sources. Third party information has been sourced from means which Elders consider to be reliable. However, Elders has not independently verified the information and cannot guarantee its accuracy. Links or references to third party sources are provided for convenience only and do not constitute endorsement of material by third parties or any associated product or service offering. While Elders has exercised reasonable care, skill and diligence in preparation of this article, many factors including environmental/seasonal factors and market conditions can impact its accuracy and currency. The information should not be relied upon under any circumstances and, to the extent permitted by law, Elders disclaim liability for any loss or damage arising out of any reliance upon the information contained in this article. If you would like to speak to someone for tailored advice specific to your circumstances relating to any of the matters referred to in this article, please contact Elders.