Elders' Business Intelligence Analyst Richard Koch discusses his data driven forecast for the Australian sheep market this winter.
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The sheepmeat market has diverged in the past month. Good trade and export weight lambs and heavy sheep prices have improved whilst any store or lighter quality stock have struggled. Although supplies have remained large, offerings are increasingly dominated by store and lighter stock with other types in limited supply which explains the divergence in prices.
But help is on the way from a seasonal reduction in supplies. Sheep and lamb slaughter has started to flatten out and should soon start to ease seasonally which should allow prices to firm.
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Demand for sheepmeat appears to have recovered with a steep fall in prices over the past year looking to have won sheepmeat back a seat at the dining table.
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Restocker lambs
Restocker lamb prices are being supported by the large discount to heavy weights which has crept back over $100 per head since mid-April. The cost of feeding restocker lambs on a grain ration is currently estimated at around $60 to 70 per head, providing a gross margin of approximately $30 per head, leading to good support feeder support for restocker lambs.
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The national mutton indicator has firmed throughout May as supplies of good quality heavy weight sheep start to ease.
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Supplies of sheep will now start to tighten as we head into winter and prices should continue to move higher.
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.
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