Not all restocker lambs are equal

The National Restocker Lamb Indicator (NRLI) had over 27,000 head of lambs used in the calculation last week.  The largest contributing state was WA, but where the numbers are coming from can fluctuate wildly across the course of the year. 

We know how variable, and different, to the East Coast WA lamb prices can be.  The NRLI also includes merino lambs, which in general, are discounted to crossbred lambs.  For someone looking to sell crossbred lambs in NSW, the NRLI might not give a great indication of price.

Meat and Livestock Australia’s (MLA) database now allows us to create our own price series from the data that makes up the broader indicators.  Figure 1 shows the three categories that go into the NSW restocker lamb indicator.  The NSW Restocker is crossbred lambs bought by restockers.  The Feeder is lambs bought by feedlots, and the Merino Restocker is merino lambs.

We can see in Figure 1 that crossbred lambs have been tracked very closely in the last two years, whether they go to a restocker or feeder.  Merino restocker lambs were tracking closely to crossbred lambs up until the end of 2021, but have become heavily discounted in the last two years.

Another indicator available to restockers is the ‘Online Lamb’ indicator, which is sourced from Auctionplus and published by MLA.  The Online Lamb is reported in dollars per head, so in Figure 2 we have pulled out the NSW data, and put it against the right-hand scale.  The Online Lamb indicator follows the NSW Restocker closely. 

The Eastern States Trade Lamb Indicator (ESTLI) is also in Figure 2, with all three lamb prices following similar trends.  Restocker lamb prices will generally track finished lamb prices closely as processors compete on borderline lambs, and buyers adjust margins.