New season lambs cause buyers to ‘Weight’and see

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It’s out with the old and in with the new at the nations saleyards this week. New season lambs are on the march and are splitting buyers with the variation of weight and condition. Older sheep were swarming the yards, but demand was up to the task.

The biggest cohort of lambs since January this year made its way to the yards this week, with preliminary data suggesting the number eclipsed 260,000 lambs. It could’ve been even higher though, per MLA saleyard reports, Wagga yardings were impacted by local storm conditions causing bidders to up the ante for heavy lambs. 

Further south and the big jump in throughput saw the market open softer in Ballarat and with plenty of stock to choose from, Bendigo buyers prioritised “fresher conditioned stock”.  In Hamilton, however, quality was excellent and attracted interstate, supermarket and local buyers pushing lambs higher. On the West Coast, lamb supply dipped in Muchea, causing keen bidding for the top-end new season lambs and Katanning saw restocker demand for light lambs but limited processor interest.

When it comes to lambs at the moment, lighter lambs are out-populating the heavy lambs considerably, driving a premium for finished stock and pushing restocker-type lambs lower. The National Heavy Lamb Indicator improved 26c to 843c/kg cwt and the National Restocker lamb indicator lost 34c to 664c/kg cwt. On balance, the Eastern States Trade Lamb Indicator (ESTLI) lost 9c to 789c/kg cwt.

Preliminary NLRS data has national sheep yardings this week at over 124,000 head, the highest number since March this year. Victorian sheep yardings were 34% higher week on week but the wave of supply didn’t drag sellers below the surface. The National Mutton Indicator (NMI) improved 10c to 324c/kg cwt and is now sitting more than double (160%) last year’s price.

As detailed in our recent commentary Mutton supply has been booming at the yards this spring and it looks to have ended up in Chinese supermarket refrigerators as mutton exports broke monthly records set in the mid 1990’s. As investigated by Angus Brown on Mecardo this week, the big export numbers look less like national liquidation but a symptom of the sheer size of the flock (read more here).

Renewed demand for mutton out of China is important for the trade as the flock navigates through the plateau of the flock reaching maturity. What is less reassuring is consideration as to why the Chinese mutton market has kicked on all of a sudden. A shift away from importing lamb shows us that consumers in China are choosing more affordable cuts (a reflection on the economic climate in China).  The sheer volume of mutton China has imported suggests getting their hands on volume right now is more important than it was a few months ago, (I wonder why?).  

Next week

Lighter lambs aren’t the end of the world with lamb exports to the Middle East still going strong, but what is the limit of restocker appetites? Government slaughter data released next week should provide a clearer picture of the room available to restock.

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Click on graph to expand

Click on graph to expand

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Data sources: MLA, BOM, Mecardo

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