Mediocre market doesn’t slow supply

Sheep in paddock in NSW, photo by Adele SMith

Some lamb categories rallied ever so slightly this week, but mutton continued to drop despite sheep yardings being lower week-on-week. Producer preference to avoid uncertain saleyard returns remains evident as weekly slaughter numbers continue to outpace yard throughput.

Despite a solid drop in the number of sheep making up the national mutton indicator this week, there was no price relief after last week’s plummet, falling another 13 c/kg to land at 244 c/kg /cwt. Latest mutton slaughter figures, a week delayed, had numbers at 44% higher year-on-year for the last week of July, while this week’s yardings were lower week-on-week, but still above the corresponding week last year.

NSW yards made up nearly 50% of the throughput for mutton, with Dubbo having the majority and averaging 10 c/kg below the indicator, while both Wagga and Forbes sold well above it. At 303 c/kg/cwt, Wagga Wagga mutton was at a 60c/kg plus premium to both major Victorian yards in Bendigo and Ballarat.  Out west in WA, the mutton indicator dropped 62 c/kg/cwt or 25% week on week, finishing at 189 c/kg/cwt.

New season lambs have entered the market in NSW, but heavy lambs are still attracting the best prices, with the restocker lambs undesired. Looking at lambs, Wagga Wagga also outperformed other yards, making up more than 20% of the Trade Lamb Indicator (the largest percentage) and still averaging more than 70c/kg above that price. Trade lambs lifted 12c/kg for the week, to 485 c/kg/cwt. Very small numbers saw Victorian trade lambs hold firm at 520c/kg/cwt, while NSW experienced an increase of 26c/kg, but still sits behind its southern neighbour at 488 c/kg/cwt. A small portion of new season lambs has landed in southern NSW yards, selling from $100 to $140 a head (593-623c/kg) for trade weights at Wagga Wagga, and averaging 538c/kg for heavy suckers, and similar prices at Forbes.

Heavy lambs also lifted this week, to 489c/kg/cwt, with close to half of the indicator-eligible sheep going through Wagga Wagga, which averaged 511 c/kg/cwt. This was countered by Forbes, the next biggest contributor, which averaged about 35 c/kg less than the indicator. Unsurprisingly to note is that for July, heavy lambs fell 9% from the previous month, compared to restockers, Merinos and light lambs, all of which had steeper declines.

Next week

Producers are either unwilling or unable to pull back on supply despite sheep and lamb prices losing ground.  Most will be making way for the next crop of lambs, and therefore need to get rid of what’s unnecessary, regardless of how it might perform. Suckers could help lamb find some support, but this might slow down mutton slaughter which may hinder the sheep front.

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Data sources: MLA, Mecardo

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