A short week, and closed saleyards on Thursday has culminated in some relief on the supply front as combined lamb and sheep yardings nationally dropped 44% week on week.
The Eastern States Trade Lamb indicator (ESTLI) improved 39¢
to 673¢/kg cwt this week which was 6% higher week on week. The trade lamb price bounce is representative
of the wider lamb market direction this week, with lower yardings (therefore
less stock to choose from) creating a competitive atmosphere for buyers whose
demand continued its recent trajectory.
Heavy and Light lambs nationally posted gains of 29-35¢ for
the week, with saleyard reports at Ballarat noting strong demand for high
quality lambs in these categories. The National
Mutton Indicator (NMI) showed a modest 17¢ improvement to 236¢/kg.
The National Merino Lamb indicator rose 63¢ to 498¢/kg cwt
(14% higher week on week). The
improvement in price has no doubt been driven by the decline in throughput of
merino sheep to the yards relative to the previous month, but recent rebounds
in the wool market couldn’t have hurt either.
Victorian trade lambs increased 38¢ to 665¢/kg cwt, but NSW
fared even better with a 46¢ leap to 684¢/kg cwt. Victorian trade lambs are
back where we started a year ago, just 2¢ lower than the same time last year. But
what a whirlwind journey they went through, with prices moving 365¢/kg from
bottom of the market in September at 414¢/kg cwt to the highs seen in the
second week of January at 779¢/kg cwt.
Whilst no one had predicted the complex combination of
drivers that would contribute to a highly volatile year, the decline seen in
mutton and lamb prices is not without precedent. As investigated by Andrew Woods this week (read more here) price
falls in sheepmeat in 2023 were similar to earlier patterns during the past
half a century however price volatility during the past 10-15 years has been
lower than in earlier decades, which made the 2023 downturn even more of a
surprise.
Next week
With the outlook not predicting any meaningful rainfall events in the next few weeks, it likely that restockers won’t be bringing their umbrellas or chequebooks to the yards (the restocker indicator lost 64¢ this week).
Slaughter remains elevated but in a typical cycle we would begin to see slaughter ease into Winter. However the previous two seasons we have seen this cycle impacted by the onslaught of supply. How this season reacts is yet to be seen but slaughter capacity is well placed compared to this time last year to handle more stock.
In mid-2022 Mecardo looked at the international supply of sheep meat (albeit from a limited number of countries) showing how lower supply had positively correlated
A short week, and closed saleyards on Thursday has culminated in some relief on the supply front as combined lamb and sheep yardings nationally dropped
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Join the Mecardo team for the Commodity Conversations podcast, where we provide short weekly market recaps and longer conversations with guests to discuss the drivers and trends in livestock, grain and fibre markets.
In this report for LiveCorp and MLA, we analysed the historical trends in the demographics of the Australian sheep flock, examining domestic factors that influence farm-level enterprise decision making.
We don’t just bring you the most up to date market insights. Find out more about Mecardo’s services including risk management advisory, modelling, benchmarking, research & consultancy.
44% drop in supply springs market into action
The Eastern States Trade Lamb indicator (ESTLI) improved 39¢ to 673¢/kg cwt this week which was 6% higher week on week. The trade lamb price bounce is representative of the wider lamb market direction this week, with lower yardings (therefore less stock to choose from) creating a competitive atmosphere for buyers whose demand continued its recent trajectory.
Heavy and Light lambs nationally posted gains of 29-35¢ for the week, with saleyard reports at Ballarat noting strong demand for high quality lambs in these categories. The National Mutton Indicator (NMI) showed a modest 17¢ improvement to 236¢/kg.
The National Merino Lamb indicator rose 63¢ to 498¢/kg cwt (14% higher week on week). The improvement in price has no doubt been driven by the decline in throughput of merino sheep to the yards relative to the previous month, but recent rebounds in the wool market couldn’t have hurt either.
Victorian trade lambs increased 38¢ to 665¢/kg cwt, but NSW fared even better with a 46¢ leap to 684¢/kg cwt. Victorian trade lambs are back where we started a year ago, just 2¢ lower than the same time last year. But what a whirlwind journey they went through, with prices moving 365¢/kg from bottom of the market in September at 414¢/kg cwt to the highs seen in the second week of January at 779¢/kg cwt.
Whilst no one had predicted the complex combination of drivers that would contribute to a highly volatile year, the decline seen in mutton and lamb prices is not without precedent. As investigated by Andrew Woods this week (read more here) price falls in sheepmeat in 2023 were similar to earlier patterns during the past half a century however price volatility during the past 10-15 years has been lower than in earlier decades, which made the 2023 downturn even more of a surprise.
Next week
With the outlook not predicting any meaningful rainfall events in the next few weeks, it likely that restockers won’t be bringing their umbrellas or chequebooks to the yards (the restocker indicator lost 64¢ this week).
Slaughter remains elevated but in a typical cycle we would begin to see slaughter ease into Winter. However the previous two seasons we have seen this cycle impacted by the onslaught of supply. How this season reacts is yet to be seen but slaughter capacity is well placed compared to this time last year to handle more stock.
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Click on graph to expand
Click on graph to expand
Data sources: MLA, Mecardo
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International sheep meat supply and lamb prices
In mid-2022 Mecardo looked at the international supply of sheep meat (albeit from a limited number of countries) showing how lower supply had positively correlated
44% drop in supply springs market into action
A short week, and closed saleyards on Thursday has culminated in some relief on the supply front as combined lamb and sheep yardings nationally dropped
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Independent analysis and outlook for wool, livestock and grain markets delivered to you as it’s published
Listen to the podcast
Join the Mecardo team for the Commodity Conversations podcast, where we provide short weekly market recaps and longer conversations with guests to discuss the drivers and trends in livestock, grain and fibre markets.
Research: Analysis of the Australian sheep flock
In this report for LiveCorp and MLA, we analysed the historical trends in the demographics of the Australian sheep flock, examining domestic factors that influence farm-level enterprise decision making.
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We don’t just bring you the most up to date market insights. Find out more about Mecardo’s services including risk management advisory, modelling, benchmarking, research & consultancy.