Sheep update - August 2024

Sheepmeat prices have held up well, assisted by some seasonal easing in supply. There is a shortage of heavy sheep and lambs in the south where the supply of new season lambs is 5 to 6 weeks behind normal which is seeing southern processors active in northern markets supporting values across the board. 

Throughout July, several processors have taken the opportunity to close for seasonal maintenance ahead of new season supplies.

The main exception to the firm price trend has been for restocker sheep, which have seen a tailing off in demand seasonally. These lambs will soon be competing with supplies of new season lambs and given the poor season in many southern lamb producing areas, the expectation is for larger availability of store and restocker lambs from these areas. 

Sheepmeat exports lifted again in July with exports to the US, Middle East and China leading the way, favourable currency movements in recent weeks should lend some support to exports. Hopefully, tensions in the Middle East don’t have any adverse impact on our exports to that region (this would have implications for mutton and light trade lamb values). 

Some exporters are noting that there is resistance to higher prices in export markets with processing margins tightening up in recent months owing to the rise in local sheepmeat prices. Difficult trading conditions are being noted in most large sheepmeat importing countries with the exception being the north American market where trading conditions are holding.

Heavy weight lambs numbers tighten

The national indicator for heavy lambs has moved well above the 5yr average during July. The struggle to find lambs of weight and the delay to the new season flush in the south is sending processors far and wide to source stock to meet trade and export demand. 

Mark Atkin, Elders Branch Manager at Guyra and Armidale said “last week we sent over 10,000 lambs to southern processors, they are cleaning up the tail of our old season lambs. Our poor spring last year meant that many of our lambs have struggled to meet weight specifications during autumn and were held over given the rising prices for slaughter weight lambs”. 

Similar market activity is being noted by Martin Simmons, Elders Branch Manager at Dubbo, who said “sheep and lamb numbers remain strong, with 40,000 head yarded weekly over the last 6 weeks. Interest levels in the lamb market continue to improve each week, yet I would say our quality throughout the market is only fair. We are yarding many secondary merino and dorper lambs as the 2023 drop lambs have run out of time with their teeth. Our good lambs of all breeds are attracting plenty of attention due to short supplies”. 

Heavy lamb indicator c/kg lw

The table shows the heavy weight lamb saleyard indicator price for each state against last week, last month and last year. Source: MLA

Trade lambs find firm demand 

Normally lamb prices would be starting to ease seasonally, but Elders agents are reporting that the poor autumn in many southern areas has delayed the start of the new seasons lambs which is supporting trade lambs values.

Damien Webb, Elders Northern South Australia Livestock Manager and Pastoral Area Manager reckons “in general, the new season lamb sell off is 4 to 6 weeks behind the average with most lambs 5 to 10 kg liveweight behind normal”. 

In the north, Mark Atkin, Elders Branch Manager Guyra and Armidale, said “given lamb prices at the time, we only had one client buy replacement ewes from our west last November, which suggests that clients didn’t replace their cast-for-age (CFA) and dry ewes last season. We anticipate that the number of ewes joined may be back around 20 per cent on previous years and while lambing percentages should be higher given the better season, we won’t have as much supply this year and won’t see any new season lambs before Christmas”. 

Martin Simmons, Elders Branch Manager Dubbo, suggested the same from the central west of NSW, stating “we are yet to see any decent numbers of new season lambs enter the market which is already 6 weeks behind schedule. A poor finish to 2023 is having a major influence on their lack of presence in the marketplace”. 

Trade lamb indicator c/kg lw

The table shows the trade weight lamb saleyard indicator price for each state against last week, last month and last year. Source: MLA

Restocker lamb values flatten

Given the season in large lamb producing areas in the south, there is an expectation of larger number of restocker stock available this year. This may explain why the restocker market has been more subdued in the past month. Many areas across western Victoria and the inside country of South Australia are still looking for more rain entering spring.

Damien Webb, Elders Northern South Australia Livestock Manager and Pastoral Area Manager said “given the lack of paddock feed and hay/grain supplementation availability following the long dry spring to autumn period, the common consensus is that clients will (and in some cases, have already) offload dry and CFA ewes, whilst serious consideration is also being given by many producers to market lambs as stores, rather than running them out to heavier weights. Gut-feel is that there will be larger numbers of store lambs on the market this year, compared to previous years”. 

Restocker lamb indicator c/kg lw

The table shows the restocker lamb saleyard indicator price for each state against last week, last month and last year. Source: MLA

Mutton prices start to flatten

The closure of several sheep processors for seasonal maintenance in recent weeks has allowed mutton prices to flatten after a couple of months of solid rises with lower demand meeting shrinking supplies.

Martin Simmons, Elders Branch Manager Dubbo, noted that the “mutton market has finally found some consistency, and like the lamb market, lacks a lot of better finished sheep. The price range in the mutton has settled between 350 to 450 cents per kg to average 400 cents per kg.’

Sheep indicator c/kg lw

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.