Sheep muster in outback Queensland near Charleville.

Unseasonably strong supply is adding to the pressure on the lamb and sheep market. The winter price rally which usually accompanies the seasonal low in supply is yet to surface on either account, as lambs and sheep just keep coming.

The Eastern States Trade Lamb Indicator (ESTLI) dropped 25¢ over the week to settle at 758¢/kg cwt. This now puts the ESTLI at 106¢ below the same time last year. In the West, the Western Australian Trade Lamb Indicator (WATLI) continued it’s fall, shedding another 22¢ to 573¢/kg cwt. All categories of lamb in WA are trading at between 164 to 344¢ below the same time last year.

Mutton prices also lost ground over the week. The National Mutton Indicator dropped 30¢ to 563¢/kg cwt. Results were mixed in Victoria, where early saleyard reports pegged throughput significantly lower than the week prior as producers respond to the cheaper market. Finished lambs in Victoria improved slightly on last week, while Merino and Restocker lambs ended weaker. Results were also mixed in SA, while in NSW it was red ink for all categories except for Restocker lambs which bounced back up 94¢ to 771¢/kg cwt.

For the week ending the 24th of July east coast slaughter bounced 20% on the week prior to see 368,271 lambs processed. The number of sheep destined for the processor also lifted 17% compared to the week prior. Combined, sheep and lamb slaughter was 10% higher than the average levels for this point in the season.

Stock were flocking to yards last week. Over 19,000 lambs were yarded in the east, which was higher than the same time last year, and 12% above seasonal average levels. Tas, NSW and Victoria all contributed to the stronger throughput. East coast sheep yardings were also unseasonably high. Over 80,000 head were yarded, which is the strongest week of sheep yardings in the east so far in 2022.

The week ahead….

With the way the market has been heading, the question on many minds is probably – “will there be any winter price rally”. Winter is typically when we’d see processors shut down for maintenance, but it wouldn’t be surprising to see stronger than usual slaughter rates continue, given the weaker levels earlier in the year and the strong consumer demand. There is room for upside still if supply tightens but it’s unlikely to be what we’re accustomed to in winter.  

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Data sources: MLA, Mecardo

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