Buyers take a backseat & prices topple

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How quickly things can turn. The lamb & sheep market wasn’t a pretty sight this week with prices collapsing across all categories as supply lifted and buyers stepped away.

Prices for finished lambs at least had been holding relatively well in recent weeks but a flood of supply left demand in the doldrums. The Eastern States Trade Lamb Indicator (ESLTI) dropped 70¢ (9%) over the week to end at 689¢/kg cwt. We have seen trade lamb prices lower this season, in August when the FMD fears sent the market to 634¢, but given the big volumes still to come we might not have reached the low yet. The ESTLI is currently 115¢ lower than four weeks ago.

The sentiment was very different in the West, with trade lambs improving 26¢ over the week to end at 602¢. This is 93¢ higher than four weeks ago.

For the heavy lamb market there has been a lot of volatility over the last  month and this week we saw the National Indicator drop 73¢/kg cwt to sit at 743¢/kg cwt, 77¢ lower than four weeks ago. Restocker lamb prices have been on a donward trend since early November and this continues this week with the National Indicator dropping another 57¢ to end at 646¢/kg cwt. A large lift in young lamb supply was a driver in this movement.

Mutton was one of the worst performers in this weeks market. The National Mutton Indicator dropped 132¢ over the week to settle at 325¢. This was a 29% fall in just a single week and mutton is down by about 182¢ or 36% in the last four weeks.

If we turn back to last week we saw a large jump in supply in terms of saleyard throughput but lowere slaughter numbers. Total east coast lamb slaughter for the week ending the 25th of November was 336,879 head which was 6% lower than the week prior and sheep slaughterwas down 5%. For lamb slaughter this was close to the levels of the same week in 2021, but remains 5% below the five year seasonal average.

National sheep and lamb yardings for last week reached 303,001 head which was a 42% lift on the week prior. Lamb yardings are still trailing below the levels of this time last year, with last weeks volumes in the east 10% lower. The early throughput reports from this week indicates that a jump in yardings was a dominant factor in the weaker market. At the time of writing, national combined sheep and lamb throughput is reported at 346,577, a 14% lift on the week prior.

The week ahead….

As we reported earlier this week, the MLA/AWI sheep producers intention survey results suggests 10% more lambs were maked in the October survey compared to 2021. Nearly half the lambs on hand are set to be held over until the new year.

While more supply driven pressure is to come, plenty of feed means there will be opportunities.

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Data sources: MLA, Mecardo

Photo Credit: Debbie Christinelli “Golden Hour”

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