Lambs fired up but mutton still in the freezer

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As BBQs fired up across the country this week for our biggest period of domestic lamb demand, and a short selling week at the yards; the market lifted for all categories of lamb. Mutton remains on ice, with prices still moving lower as supply overwhelms demand.

It was a shorter week with the public holiday on Thursday, so the reported prices end the week at the close of Wednesday. The Eastern States Trade Lamb Indicator (ESTLI) gained an extra 27¢ from the close of last week to settle at 762¢/kg cwt on Wednesday. There was little price movement for trade lambs in the west with the Trade Lamb Indicator lifting just a few cents to 635¢/kg cwt.

 

Processors continued to battle it out for well-finished heavy lambs which pushed the National Heavy Lamb Indicator up another 16¢ on last week’s close, to sit at 810¢/kg cwt. Heavy lambs averaged 777¢ in 2022, so while the current price is 50¢ lower year-on-year, it is on the higher end of levels seen over the past year.

 

The increase in restocker lamb prices also carried through to this week. The National Restocker Lamb Indicator rose 14¢ to 711¢/kg cwt with all states except Tasmania and Western Australia contributing to the price improvement. Light Lamb prices bounced for the first time this year, gaining an extra 43¢ on last week’s close.

 

Lamb supply continues to build, with 228K lambs yarded across the country last week and 109K sheep. For the eastern states, there was a 15% lift in lamb throughput and a 3% lift in sheep yardings week on week. These levels are not only higher than the same time last year but are also above the seasonal five-year average.

 

The downward trend continues for the mutton with the National Mutton Indicator (NMI) shedding another 9¢ to 298¢/kg cwt.


Processors are also ramping up following the Christmas period. For the week ending the 20th of January, lamb slaughter in the east was 29% higher than the same time last year and 4% above the five-year seasonal average. Over 126k head were processed for eastern sheep markets this week which is 77% higher than the same week last year.

The week ahead….

Lamb prices generally track sideways in February, but last year we saw them slide until April.  With MLA surveys tipping large numbers intended for turnoff in the first half of this year, supply pressure is unlikely to fade away for a while yet.

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Data sources: Meat & Livestock Australia; Mecardo

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