The national sheep and lamb indicators were bathed in red this week, with prices nosediving substantially. Lighter lambs including restockers, merinos, light, and trade specifications all lost 4-5%, with the wooden spoon going to the merino lambs, which dipped 34¢ (-5%) to 702¢/kg cwt. Heavy lambs were more resilient, dipping only 12¢(-2%) to 759¢/kg cwt.
The major indicators, the ESTLI and NMI both lost ground, with the ESTLI shedding 24¢(-3%) to close the week at 774¢/kg cwt, while the NMI fared slightly better, dropping 9¢ (-2%) 780¢/kg cwt and 686¢/kg cwt.
Looking at the preliminary yardings statistics for each of the categories, the big dip in prices can be chalked up to a significant surge in yardings in comparison to demand. For example, eligible lambs contributing to the national trade lamb indicator were up 46% week on week to a 17,263 head. Similarly, the numbers behind the restocker lamb indicator surged 42% to 16,939 head. Heavy lamb supply also increased by a smaller relative amount, 25%, from 48,662 last week, to 60,856 head. With the NMI index offering increasing 55% to 20,252 head, prices held up well when considering the strong influx of supply.
Last week’s east coast lamb slaughter skyrocketed 17% to 350,875 head, while sheep slaughter numbers leapt 31% to 93,302 head.
Last week’s official release of yardings data were indicative of a large week on week increase in supply of lambs, with east coast lamb yardings up 18% to 176,462 head, while sheep numbers lifted 32% to reach 62,096K head. Sheep yardings are up a whopping 38% from the levels seen at the same time last year, so it looks like producers are finally beginning to offload some of the older sheep that were held onto over the last season or two. NSW sheep yardings were up last week by 40%, with VIC offerings increasing at 20%.
Lamb market nosedives under the weight of supply
The national sheep and lamb indicators were bathed in red this week, with prices nosediving substantially. Lighter lambs including restockers, merinos, light, and trade specifications all lost 4-5%, with the wooden spoon going to the merino lambs, which dipped 34¢ (-5%) to 702¢/kg cwt. Heavy lambs were more resilient, dipping only 12¢(-2%) to 759¢/kg cwt.
The major indicators, the ESTLI and NMI both lost ground, with the ESTLI shedding 24¢(-3%) to close the week at 774¢/kg cwt, while the NMI fared slightly better, dropping 9¢ (-2%) 780¢/kg cwt and 686¢/kg cwt.
Looking at the preliminary yardings statistics for each of the categories, the big dip in prices can be chalked up to a significant surge in yardings in comparison to demand. For example, eligible lambs contributing to the national trade lamb indicator were up 46% week on week to a 17,263 head. Similarly, the numbers behind the restocker lamb indicator surged 42% to 16,939 head. Heavy lamb supply also increased by a smaller relative amount, 25%, from 48,662 last week, to 60,856 head. With the NMI index offering increasing 55% to 20,252 head, prices held up well when considering the strong influx of supply.
Last week’s east coast lamb slaughter skyrocketed 17% to 350,875 head, while sheep slaughter numbers leapt 31% to 93,302 head.
Last week’s official release of yardings data were indicative of a large week on week increase in supply of lambs, with east coast lamb yardings up 18% to 176,462 head, while sheep numbers lifted 32% to reach 62,096K head. Sheep yardings are up a whopping 38% from the levels seen at the same time last year, so it looks like producers are finally beginning to offload some of the older sheep that were held onto over the last season or two. NSW sheep yardings were up last week by 40%, with VIC offerings increasing at 20%.
The week ahead….
Prices have slid substantially in response to what looks to have been a very sharp increase in yardings of sheep and lambs this week. Unfortunately, year-to-date slaughter is looking to be well behind the level we need to be at given the outlook on sheep and lamb slaughter is a 7% rise from last year. This indicates that there is probably a sizable backlog of lambs still out there, which will need to show up in the saleyards sooner rather than later, and in substantial volumes which will put continued pressure on price.
The saving grace we have is that demand for heavy lambs seems to be relatively strong due to the massive lamb demand paradigm shift that has occurred in the US due to COVID which is looking to have quite a persistent impact on Australian lamb exports.
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Data sources: MLA, Mecardo
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