The Eastern States Trade Lamb Indicator (ESTLI) gained 4¢ WoW to 1164¢/kg cwt, and the West Australian Trade Lamb Indicator (WATLI) eased 5¢ to 1091¢/kg cwt. Lambs’ back to the paddock at a national level were 43¢ higher WoW to 1135¢/kg cwt. Merino lambs couldn’t convert wool market optimism into elevated saleyard pricing as the National Merino lamb indicator lost 42¢ to 1034¢/kg cwt. Heavy lamb indicators have lost the most ground in the last month, with an 18¢ decline this week to 1122¢/kg cwt.
Around the grounds at the saleyards, per the MLA, Wagga saw improvement in quality, boosting demand for lambs, and a strong showing from restockers pushed lighter types higher. Quality went the other way in Forbes, which put pressure on pricing with older lambs weighing down indicators. Competition backed off slightly in Bendigo and Hamilton; meanwhile, in Dubbo, supply pressure contributed to lower prices as merino lambs dominated the offering. Numbers in Naracoorte remain historically low, which pushed prices higher, and the lighter lambs were bid on keenly by restockers. Lambs at the yards are lighter in weight in WA at both Muchea and Katanning.
The big influx of turnoff sheep to the yards this week was met with keen demand as the National Mutton Indicator (NMI) rose by 32¢ to 802¢/kg cwt. Similar to last year, when weight is in keen demand, turnoff sheep have provided a reliable backstop for processors patiently waiting for trade spec lambs. With the NMI now 516¢ higher than this time last year, the affordability of mutton vs lamb will be tested as the mutton discount to the ESTLI reached its lowest point this week since 2022 (Basis at-31%) (Figure 2).
MLA flock projections were released, and after the drought-driven declines this year, the MLA is forecasting the flock to increase in 2026 to 75.6 million head (2.1%) (read more here). Official flock numbers are a difficult puzzle to put together due to there being no official government flock number from the ABS since 2022; the direction of the flock is the key piece of information for the market. Flock numbers rebuilding is based on assumptions of a positive outlook for spring rainfall this year and a return to average conditions in 2026, allowing producers to retain ewes. Lamb slaughter is expected to remain consistent at 24 million head next year, which is important for the supply chain, but a drop in sheep slaughter is expected as a consequence of the rebuild.
Mutton discounts are declining as the trade awaits better lambs
Next week
Until weights are consistently heavier around the country, saleyard pricing will likely see buyers bidding competitively for heavier lambs and backing off for the lighter ones. The saleyard offering volatility is keeping buyers on their toes and will do so for the next fortnight until the cavalry arrives.
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Data sources: MLA, Mecardo
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