Meat & Livestock Australia NLRS data shows that the month of January started very strong in 2024, with elevated levels of supply for the first month. This supply-side pressure has been reflected in the prices of the indicators as they have finished the month slightly below where they began the new year.
The National Mutton Indicator (NMI) finally passed the 300 c/kg threshold finishing the week at 313 c/kg a rise of 12% on last week, the largest percentage increase for all the MLA indicators. Sheep yardings were up 55% (36.8k Head) on the week prior, which isn’t a fair comparison as last week was cut short by the national public holiday. So, comparing to two weeks prior (Friday ending 19/1/24) Yardings they were up 7% (6.8k Head). The last time the NMI was above the 300c/kg mark was in late July but it remains 6% down on this time last year. Wagga contributed 24% to the indicator and helped clear the 300c/kg hurdle, averaging 344 c/kg up 7% on 24.7k head.
The Eastern States Trade Lamb Indicator (ESTLI) declined slightly this week on last, down 2% (13 ¢/kg) to 707¢/kg. Trade lamb prices are just keeping their head above the 700 c/kg mark reached earlier in January. When comparing trade lamb yardings to the previous full week of sales (week ending Friday 19/1/24) they were up 2%. The two largest contributors to the ESTLI, Wagga and Hamilton, had a negative pull on the indicator averaging 4% and 6% respectively below the indicator, despite both saleyard reports talking of strong buyer competition.
This week’s “biggest loser” was the Merino Lamb Indicator, down 10% (60 ¢/kg) closing the week at 543 ¢/kg. This is in line with the range it averaged in the first half of last year, in between the 500-600 ¢/kg mark. The 22-24kg cwt weight range of merino lambs received the highest average price of the indicator at 650 ¢/kg, with the most supply coming from the lighter lambs with a weight range of 12-16 kg cwt making up 22% of the indicator.
Previous week slaughter for both lamb and sheep data was down week on week (due to the holiday break) but is still at a level well above last year and the five-year average. The total lamb and sheep slaughter volume for January 2024 averaged 23% (400k) above the five-year average. This has been led by the increase in capacity from processors allowing them to handle the increase in supply, as well as the increase in lighter lambs being processed as bagged lambs which don’t require boning allowing for more throughput at meatworks.
Prices are beginning to stabilize after the last two months of gains on the back of restored confidence and tighter S&D balance for finished lambs. We expect to see prices plateau as demand adjusts to the new levels, offset with a normalisation from the high levels of supply we have seen.