Heavy lamb price records tumbled this week in Victoria as we approach the home straight on heavy lamb supply. It wasn’t just the heavy weights that caught buyers’ eyes as Light lambs also saw $1/kg improvement this week at the yards.
Despite the extremes in conditions, pricing and numbers driving the lamb and sheep market currently, seasonality still plays a pivotal role in the minds of buyers. With combined lamb and sheep supply to the yards falling for a third consecutive week, tightening supply has begun to flex on the market.
As investigated on Mecardo this week, Lamb slaughter surged in q1 this year to 6.85 million head, the second highest on record (read more here). Processors hadn’t shied away from this level of volume. Based on weekly figures from the NLRS, lamb supply has been contracting from this high tide mark which has supported prices the last 2 months. This week was the culmination of the decline in heavy lamb availability and persistent dry conditions from southern sheep regions.
After winter comes spring and sucker season typically has the highest slaughter figures for lambs. A difficult season and higher sheep turnoff will likely impact the supply of these lambs later in the year. No doubt that those with feed have looked at these heavy lamb premiums and have decided to jump at the restocker types available. Particularly if many of the new drop lambs aren’t going to be ready when needed (like what happened last season). The National restocker lamb indicator improved 72¢ week on week to 862¢/kg cwt.
Processors’ needs are a bit more urgent as we approach the run to winter, and that also boosted trade lamb values this week. The National Trade Lamb indicator improved by 111¢ to 862¢/kg cwt. A 47¢ improvement Week-on-Week for Mutton indicators a year ago would have led the evening news, but things move quickly in this current market, the national mutton indicator sits at 616¢/kg cwt.
The week ahead….
You would expect more lambs to come out of the woodwork after this week’s result but how much gas is left in the tank for buyers?
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Big week for big lambs
Despite the extremes in conditions, pricing and numbers driving the lamb and sheep market currently, seasonality still plays a pivotal role in the minds of buyers. With combined lamb and sheep supply to the yards falling for a third consecutive week, tightening supply has begun to flex on the market.
As investigated on Mecardo this week, Lamb slaughter surged in q1 this year to 6.85 million head, the second highest on record (read more here). Processors hadn’t shied away from this level of volume. Based on weekly figures from the NLRS, lamb supply has been contracting from this high tide mark which has supported prices the last 2 months. This week was the culmination of the decline in heavy lamb availability and persistent dry conditions from southern sheep regions.
After winter comes spring and sucker season typically has the highest slaughter figures for lambs. A difficult season and higher sheep turnoff will likely impact the supply of these lambs later in the year. No doubt that those with feed have looked at these heavy lamb premiums and have decided to jump at the restocker types available. Particularly if many of the new drop lambs aren’t going to be ready when needed (like what happened last season). The National restocker lamb indicator improved 72¢ week on week to 862¢/kg cwt.
Processors’ needs are a bit more urgent as we approach the run to winter, and that also boosted trade lamb values this week. The National Trade Lamb indicator improved by 111¢ to 862¢/kg cwt. A 47¢ improvement Week-on-Week for Mutton indicators a year ago would have led the evening news, but things move quickly in this current market, the national mutton indicator sits at 616¢/kg cwt.
The week ahead….
You would expect more lambs to come out of the woodwork after this week’s result but how much gas is left in the tank for buyers?
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Data sources: Mecardo; Meat and Livestock Australia
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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.
MEET THE TEAM
Our team of market analysts are recognised as leaders in Australian Ag market analysis, providing invaluable insights to help you navigate the ever-changing commodity landscape.
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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.