If you ever listen to or read the Meat and Livestock Australia (MLA) market reports from the saleyards, you’ll know that lamb lot feeders have become much more active in saleyards recently. Anecdotally lamb lot feeding is on the rise, and with time we will hopefully get some data around numbers on feed, like cattle, but for now we can use price indicators as a pointer to activity.
With grain prices at the lower end of the price range, and finished lamb prices at extreme highs, there has been plenty of encouragement for those finishing lambs on grain. Record low rainfall in key southern lamb producing areas over the last two years has helped shift lamb producer mindset on grain finishing.
The dry seasons have seen a boom in containment and feeding facilities, and with a market that has been consistently steady or rising for two and a half years, you couldn’t get a better period to buy in lambs, and finish on feed.
Figure 1 shows the NSW Restocker Lamb Indicator tracking well below the Eastern States Trade Lamb Indicator (ESTLI) and the NSW Heavy Lamb Indicator for much of 2024 and 2025. It was in August 2025 when restocker lambs rallied to meet finished lamb values, and March when the Heavy lambs became discounted to trades and restocker lambs.
The supply of restocker lambs has dried up in June, pushing prices to a premium to the ESTLI and heavy lambs. This somewhat mirrors what has been normal in the cattle market for many years when grain is relatively cheap, with lighter lambs at a premium to heavy lamb.
Figure 2 shows the dollars per head buying a 19kg cwt lambs and selling a 27kg cwt lamb. The rising premium for heavy lambs since 2022 has encouraged growing lamb feeding operations, with healthy profits in a rising market. The recent rally in restocker lamb prices has seen the heavy premium fall, and lotfeeders will be hoping this is a short-term impact.
Figure 3 shows a current trade snapshot, including an estimate for feed costs. There are a lot of variables we need to make assumptions on, but the basic premise is that margins on feeding lambs remain good, providing sale prices are north of the current 1150¢/kg cwt.
The tipping point will come when new season finished lambs hit the market, but it will likely be September or October before they are heavy enough to see that end of the market.
Note that this trade calculation does not include feed, freight, treatments, or administrative costs. These will differ between enterprises and should be assessed individually when considering any trade.
What does it mean?
Consistent growth in lamb feeding margins has likely seen it’s peak, with the proliferation of feeders, and finished lamb prices seeing a peak a bit of a squeeze might come on. Going forward lamb lot feeding profits are likely to be driven by grain prices and efficiency gains.
Key Points
- Recent price movements have seen restocker lambs move to a strong ¢/kg premium to heavy lambs.
- A growing lamb feeding sector is helping drive a restocker lamb premium.
- Margins on feeding lambs might have peaked, if restocker lamb premiums remain in place.
Click on figure to expand
Click on figure to expand
Click on figure to expand
Data sources: MLA, Mecardo
