At the time of
publishing, Light lambs improved 40¢ this week, to 561¢/kg cwt driven by lower throughput
to the yards. Restockers further south did not get much of the forecast rainfall
and they bid accordingly as the indicator for restocker lambs lost 45¢ to 485¢/kg
cwt.
The improvement in
light lamb prices despite restocker involvement indicates that processors are still
keen to take advantage of current market conditions (elevated capacity and
strong demand from export markets for lighter lambs). Similarly, lower saleyard throughput saw an
improvement in the National Heavy Lamb Indicator, which improved 26¢ to 659¢/kg
cwt. With so many light lambs exiting
the system in the last 6 months, focus on securing heavier lambs will likely
strengthen in the coming months.
Lamb slaughter is raising
the roof so to speak. Last week’s slaughter of lambs nationally eclipsed half a
million head per the MLA NLRS. driven by
a 31% week-on-week increase in lambs slaughtered in Victoria (over 250K head).
This week on Mecardo, Jamie–Lee
Oldfield investigated the PULSE update for the MLA/AWI Sheep Producer Intention
Survey (read here). The update found that falling prices had deterred
producers from selling, with 2.2 million fewer lambs hitting the market than
they had planned. Those lambs that were left are going to come at some point,
with planned sales up 20% for January-June 2024 according to the survey.
It’s evident that these
lambs are already on the way. Producers pre-empting the holiday interference of
the next few weeks, appear to have made the decision to shift stock in the last
few weeks. National lamb slaughter for
the last four reported weeks (1/03/2024 – 22/03/2024) has averaged 26% higher per week than the 5-year
average.
A good week before Good Friday
Next week
As we approach June, the seasonal pattern for pricing typically heads in a cheaper direction. A return to the yarding volumes of the previous few weeks would exert some pressure on pricing in the short term.
The transition to winter will be much smoother with a bit of rainfall in the coming weeks. That should boost the confidence of those producers that intend to carry stock to heavier weights later in the year.
Have any questions or comments?
Click on graph to expand
Click on graph to expand
Data sources: MLA, Mecardo
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