Restocking lambs remain at the expensive end of the pricing spectrum. Figure 1 show the NSW Restocker Indicator and the Eastern States Trade Lamb Indicator (ESTLI). Restocking lambs are not quite at a record premium, but 16% is up there in terms of historical values.
The NSW Restocker Lamb was last week sitting at 977¢/kg cwt, compared to the ESTLI at 849¢. Comparing the two prices on a dollar per head basis, a 16kg cwt restocker lamb will cost $156/head, a 22kg trade lamb $186 per head. The extra 8 kgs cwt from restocker to trade lamb is worth just an extra 375¢/kg cwt.
The heavier the lambs get, the cheaper they become. At Wagga last week, 22-24 kg lambs sold for an average of 894¢, 26-30kg lambs for 854¢ and 30kg plus lambs 787¢. The Wagga market is stronger than those in Victoria hence trade lamb prices are higher than the ESTLI.
Figure 2 shows the curve for lamb dollar per head values against carcass weights. The curve shows that taking lambs from restocker weights to light trades is hardly worth doing, gaining only $4 per head.
From 18 to 26kgs there is good money in growing lambs out, with little decline in ¢/kg meaning almost full sale value is gained for the extra kilograms.
The value curve flattens out after 26 kgs with the lower ¢/kg for heavy lambs meaning only $3 is gained for taking lambs from 26 to 28kgs. Over the hook’s grids tell us the next step down in price is at 32kgs. A 34kg lamb is not worth much more than a 32kg lamb.
What does it mean?
Lambs are not sold individually, so it’s pretty hard to hit the sweet spot on pricing, but this analysis should give some sort of a guide for decision making. Restocker lambs are good selling, but if they move into light trade territory, holding them to heavy trades will offer good returns.
- Restocker lamb prices are strong, and are very good selling relative to light trades.
- There is good money in growing light trades out to heavy trade lambs.
- Prices step down again at 28kgs and 32kgs with best value being at the top end of the ranges.
Click to expand
Click to expand
Data sources: MLA, Mecardo