The finished lamb market experienced a slight decline this week, however, the restocker market showed signs of improvement. The recent rain seems to have provided a small boost in the outlook. That and producers have been willing to hold back from the market at the lows of pricing we’ve seen recently.

The Eastern States Trade Lamb Indicator (with its recently redefined specifications from MLA of 20-26kg cwt) had a softer week, dropping 23¢ over the week to settle at 586¢/kg cwt. While trade lamb prices have lost ground after last week’s rally, they are still 35¢ higher than the recent lows of a fortnight ago. However, in the West, trade lambs continue on their upward trajectory, jumping another 60¢ this week to 521¢/kg cwt, keeping in mind there was a limited offering.

Heavy Lamb prices fell in the eastern states, dragging the National Heavy Lamb Indicator down to 607¢. This is down 19% year-on-year.

The recent rainfall has kick-started the restocker market. The National Restocker gained another 59¢ this week to 500¢/kg cwt. This is up 32% from the recent market lows but remains 30% lower than this time last year. Merino lambs ended the week slightly higher at 509¢/kg cwt, an improvement of 6¢ over the week. Light lambs were largely steady, with the National Indicator at 502¢ after a 2¢ gain across the week.

Mutton prices trended lower this week, with a 42¢ decline in NSW offsetting small price improvements in SA, Victoria and WA. Mutton prices are fairing best in SA at 404¢/ kg cwt, while Victoria ended this week at 353¢/kg cwt.

Last week saleyard throughput dropped markedly which drove the price bounce across most categories. For the week ending the 9th of June, eastern lamb yardings were down 19% on the week prior and 22% below the five-year seasonal average. Sheep throughput remained elevated compared to history (+8% on the average), but was also down 18% on the week prior. Early yardings reports for this week indicate lamb throughput lifted, even with a shorter week for the Kings Birthday in the southeastern states but is still tighter compared to the levels of late May, and early June.

Processors in the east had been operating at a kill rate of over 500,000 head of lambs and sheep per week, but the week ending the 9th of June saw combined processing of 489,894 head which was a 3% drop on the week prior. This was still 15% higher than the five-year seasonal average though.

Next week

Last year it was in July that we started to see numbers tighten up and prices rise. With the flock expansion, we know there are more out there this season than last, but we have also been processing at much stronger rates than last year. The question is, will we see supply tighten up at all, or will the old season crop run straight through to the new?

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Click on graph to expand

Click on graph to expand

Data sources: MLA,  Mecardo

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