Nutrien Ag Solutions sheep farm.

While the wet has caused devastation and challenges in many regions, it has provided a welcome boost to lamb prices. Slaughter rates are holding steady but very few lambs have been moving through the saleyards.

The Eastern States Trade Lamb Indicator managed to hold steady on the week, sitting at 804¢/kg cwt, 17¢ below the same time last year. In the West, trade lambs bounced, up 60¢ higher on the week to 508¢/kg cwt but remains within the weak price range that began in August.

The National Heavy Lamb Indicator slipped just 4¢ over the week to 821¢, this is just 1¢ lower than the same period last year. While there is clearly strength in the finished lamb market, spurred on by processors’ desire to fill kills while the supply of slaughter lambs is tight, the store market remains much lower year on year. The National Restocker Lamb Indicator lost 13¢ on the week, moving 120¢ below the same time last year. This was driven by a large price fall in SA which offset improvements in NSW and Vic. Light lambs ended 33¢ lower despite a lighter offering while the National Merino Lamb indicator gained 3¢ over the week. 

Mutton managed to make up some ground this week, lifting 21¢ to 507¢/kg cwt. Mind you this is still 43¢ or 8% below the same time last year.

Processors appear to be getting the stock in to keep kill rates up. For the last three weeks, weekly lamb slaughter has been around the 355k mark, with the last week in October seeing 357,096 lambs processed. This was 5% above the five-year average levels for the eastern states. Sheep slaughter has also picked up from the winter lows, with last week’s tally just 2% below the five-year seasonal average.

Yardings are where we can see the impact of the wet conditions on supply. East coast lamb yardings in the last week of October dropped 20% on the week prior. Unsurprisingly NSW was the main driver, with 45k fewer lambs coming through the yards than the week prior.  

The week ahead….

Many producers are chasing a stretch of warm days and sun on the sheep’s back but the BOM’s forecast for next week isn’t looking to deliver on that wish. Finished lamb prices are likely to be supported until the weather drives supply higher, however, we may have seen the top for spring.

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Data sources: MLA, Mecardo

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