Mutton prices reached lows not seen since 2008 in the West this week, but thankfully some markets were kinder than others and trade lamb prices received a much needed lift. The market now looks to the rain radar for direction.

The Eastern State Trade Lamb Indicator (ESTLI) improved 20¢ to 450¢/kg cwt this week with saleyard supply steady at 65K head. Similarly, the West Coast tracked sideways for trade lamb supply which was met with fervour from the market as the West Australian Trade Lamb Indicator (WATLI) improved 97¢ to finish the week at 419¢/kg cwt.

Restocking demand remains latent as the wait for rainfall continues in the east. Despite supply only 100 head less than last week the National Restocker Lamb Indicator lost 29¢ to sit at 245¢/kg cwt. This decline was largely driven by saleyard results in NSW. NSW restocker lambs lost 52¢ to 240¢/kg cwt whereas south of the Murray River, Victorian restocker lambs lost just 2¢ to 284¢/kg cwt. Finished lambs tracked sideways as the National Heavy Lamb Indicator remained unchanged at 454¢/kg cwt.

Mutton throughput to the yards was up 7% this week to 81K and with plenty to choose from buyers took advantage and the mutton slide continued. The National Mutton Indicator (NMI) lost 50¢ to 137¢/kg cwt. The WA mutton indicator lost 34¢ to sit at 92¢/kg cwt, which is the lowest mutton saleyard prices have been in Western Australia since 2008.

Merino lambs did not fare much better with the national indicator losing 60¢ to finish at 237¢/kg cwt. This was despite an 11% drop in throughput nationally week on week. Merino lambs are now 55% lower year-on-year.

Preliminary reports this week have total lamb yardings down 23% week on week. This was largely driven by NSW lamb supply which was down 27% week on week. Strong slaughter momentum continues with lamb slaughter down just 1% week on week for the week ending 1st September. Sheep slaughter last week was up 4% week on week.

Next week

With initial reports from MLA suggesting sheep slaughter is picking up the pace this week the mutton performance at saleyards next week will provide an indication as to the processor and export demand for cheaper protein. Will supply chain margin and exporter demand provide support or will processors shift focus to the spring lambs ahead?

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Data sources: MLA, Mecardo

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