Restockers were up and about, with demand for new season lambs back to the paddock much stronger this week. The national restocker lamb finished 43¢ to 1026¢/kg cwt and is sitting nearly $4.50 a kilo higher than this time last year, carcase weight. More rain, and confidence in low feed grain prices.
The rest of the saleyard indicators this week saw double-digit losses despite lower numbers at the yards as new season lambs flooded in. More rain fell mainly in the north and WA, but it did reach some parts of the Riverina and Victoria as well, which likely contributed to some lambs and buyers staying home.
The national heavy lamb indicator lost 23¢ to 1156¢/kg cwt, and both light and trade lamb indicators were 30 to 37¢ lower this week. Mutton markets also followed the trend lower, losing 28¢ to finish at 715¢/kg cwt. The Eastern States Trade Lamb Indicator (ESTLI) lost 36¢ to 1135¢/kg cwt.
Mixed quality and lighter weights on big runs of lambs have contributed to the softer market tone this week, per MLA saleyard reports. Large numbers of Merino lambs are headed to the yards, pressuring prices in Dubbo and Bendigo. A big yarding with limited heavy stock saw the focus shift to lighter lambs. Not all the usual buyers were present in Ballarat, contributing to a softer market.
This week on Mecardo, Jamie Lee Oldfield looked ahead to spring to have a look at some potential supply patterns and the impact on price (read more here). Due to similar conditions and slaughter figures, 2019 looks to be a potential use case. While lamb numbers are likely still strong on farm, they will be finished later and spill further into next year, which we have seen before in similar seasons. And while historically high prices could encourage higher producer turnout at lighter weights, they will still need to be fed to slaughter weight.
Market corrects, but restockers are keen
Next week
New season lambs are now here, and the initial rush this week saw the market correct to account. Initial data suggests that well-finished grain-fed lambs are attracting premiums and that supply might outweigh demand on the lighter lambs at this current price level.
More rain might keep more ewes in the paddock. But the question remains, will the mutton market respond to keep the treadmill for heavy-framed sheep going as we approach the Chinese buying season for Aussie mutton?
Have any questions or comments?
Click on graph to expand
Click on graph to expand
Data sources: MLA, Mecardo
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