Sheep mob crossing a main road

The market was running hot this week and it was evident that the chase was on to acquire lambs with weight. With Heavy lamb throughput 8% lower week on week, the impacts of the South’s late autumn break begin to surface.

What a difference a year makes with the Eastern States Trade Lamb Indicator (ESTLI) now 54% higher year on year. The ESTLI, improved 47¢ to 842 ¢/kg cwt driven by spirited bidding for the heavier lots. As a result, the average price per head for Eastern State Trade Lambs is now above $200. 

With heavier stock supply in the South harder to find, some buyers shifted North according to saleyard reports, chasing export specification lambs. Wagga throughput for lambs was down 21% week on week, it was opportune timing as sharper pencils from buyers and a quieter saleyard pushed indicators higher. Nationally the Heavy lamb indicator improved 62¢ to 862¢/kg cwt (8%).

Feeder demand or lack thereof was the main driver behind a 36¢ decline for the national restocker indicator.  Lambs (0-22kg cwt, <12 months of age) bought by feeders totalled 2,685 head, the lowest number since the first week of January and is 77% lower than a fortnight ago. It’s a likely signal that the typical winter cool down of feeder demand for the lighter end has arrived.  Feeders buyers on average paid 87¢ less (-13%)  for this specification of lambs this week (Figure 2).

East Coast lamb slaughter year to date is 29% higher than the 5-year average, (Which includes 2019’s drought turn-off season). Even factoring some easing off as supply declines, its unlikely that momentum will collapse, particularly when we factor in that exports are humming, capacity has been built back up and there is margin to be made.  

The week ahead….

It’s been a difficult Autumn and will be a challenging Winter for sheep producers in western Victoria and parts of South Australia. Feed availability and lamb marking rates have been impacted by the conditions, and that will rear its head for the market in Spring.

Buyers might begin to factor this potential supply shock into their strategies in the weeks to come.

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Data sources: MLA, Mecardo

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