Merino wether lambs cheapest since Covid


It’s that time of year when store lambs start to hit the market, and it’s not long until the big runs of merino wether lambs start coming up for sale. The decline in sheep and lamb markets has had an impact on the wether lamb end of the spectrum, and they don’t look like bad buying.

Merino wether lambs, largely out of NSW, have become a pretty reliable trading opportunity for those looking for big lines of mouths with a couple of sources of income. 

This time last year we assessed the prices and the trade of Merino wether lambs.  The buy prices was $120/hd, and gross margins were between $75 and $100 per head, depending on when lambs were sold, weights and wool type.  That’s a few variables, but the trade largely ended well.

Figure 1 shows that at a saleyard level Merino lambs are around 100¢/kg cwt below the same time last year, while 19 micron wool prices are also a little lower.  Given the slaughter and wool price both dictate the income from trading merino wether lambs, we would expect bids to be a bit softer this year.

Early sales of woolly merino wethers, born in May and  June has seen price hover around the $100 per head level.  Some lambs were last week sold as low as $81/head, while a big line from Western NSW made $133/head.

Looking forward the 19 micron wool forward bids are a little below 1600¢/kg clean, and offers well above.  Lamb prices this summer are likely to be volatile, driven by supply fluctuations.  We expect price between 650 and 750¢, and we’ve used 550¢/kg cwt as the worst case.

Figure 2 shows how gross margins will look on a hypothetical merino wether trade where lambs hit 22kgs cwt, and cut 3kgs of 19 micron wool.  The large range in potential sell prices means there is plenty of variation in gross margin results. 

What does it mean?

The middle gross margin result is the same as last year, while the cheap buy in price means the upper end is stronger, despite the sale price being 50¢ lower.  If abundant feed is available there is little chance a loss will be made on merino wether lambs, and as a trading opportunity, it looks to stack up against crossbred lambs pretty well again this year.

Have any questions or comments?

We love to hear from you!

Print This Post

Key Points

  • New season Merino wether lambs are starting to be sold online and in saleyards.
  • With lower finished lamb prices, store Merino wether prices are also weaker.
  • Gross margins still look good on Merino wethers, with little risk of making a loss.

Click on figure to expand

Click on figure to expand

Data sources: MLA, Auctionsplus

Make decisions with confidence- ask about our board packs, bespoke forecasting and risk management services

Have any questions or comments?

We love to hear from you!

Mutton in the green

Prices rose for all bar one of the lamb and Sheep indicators this week, in what was a short selling week due to a public

Read More »

Mutton makes 12 month highs

The market was buzzing this week, with stronger competition and lighter yardings driving prices significantly higher on all types of lambs and sheep. Some decent

Read More »

Two speed spread grows

The imminent start of winter has brought with it the rain and it has delivered. The west finally got the drink it so desperately needed,

Read More »

Want market insights delivered straight to your inbox?

Sign up to the mailing list to get regular updates to new analysis and market outlooks

Independent analysis and outlook for wool, livestock and grain markets delivered to you as it’s published

Commodity conversations podcast cover image, a illustration of a sheep standing on a cow's back with grain either side
Listen to the podcast

Join the Mecardo team for the Commodity Conversations podcast, where we provide short weekly market recaps and longer conversations with guests to discuss the drivers and trends in livestock, grain and fibre markets.

Photo of a farmer surrounded by Merino sheep in dusty yards
Research: Analysis of the Australian sheep flock

In this report for LiveCorp and MLA, we analysed the historical trends in the demographics of the Australian sheep flock, examining domestic factors that influence farm-level enterprise decision making. 

Image of harvested grain pouring into a chaser bin

We don’t just bring you the most up to date market insights. Find out more about Mecardo’s services including risk management advisory, modelling, benchmarking, research & consultancy.