It was a pretty ordinary week in sheep and lamb markets. All indicators tanked, with lamb at levels not seen since the depths of the 2020 Covid closures. Mutton followed suit, and while slaughter has picked up, it’s not enough to cope with the last flush of old season lambs.
The quality of lambs appears to be normal for this time of year, in that it’s not much good. The last drafts of old season lambs are hitting the market, with many seemingly booked direct, and saleyard demand stagnating.
The weekly stats table shows we are 12% and 15% down on last week for lamb and mutton respectively, and over 30% on this time last year.
The late run of old lambs appears to be clashing with some maintenance closures of processors. While there were more sheep and lambs killed in the week ending (figure 2), numbers were still 14% below then peaks seen in May and June.
The timing and magnitude of the price fall looks eerily similar to that of 2020. Figure 2 shows a dramatic drop in late July in 2020, but this was driven by weakening export demand, with supply still very tight.
This year it is supply overwhelming slaughter capacity, and it should be a short term impact. Providing lamb and mutton export prices remain strong, processors should be making more money, and this should encourage increasing slaughter space. Obviously this depends on labour and ability to ship product, both proving bottlenecks in the supply chain at the moment.
The week ahead….
New season lambs are just around the corner, and the old season flush should soon be over. This should equate to a price bounce, and we can see even in 2020 it came relatively quickly. It’s not time to adjust the budget for this year’s sales just yet.
The big spring store sales are progressing through the Riverina, and it coincides with rapid spring growth in high rainfall zones further south and east.
Australian sheep and lamb exports increased in September but remained subdued in relation to recent trends. The US took dominant market share for the month,
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Old lambs trample prices
The quality of lambs appears to be normal for this time of year, in that it’s not much good. The last drafts of old season lambs are hitting the market, with many seemingly booked direct, and saleyard demand stagnating.
The weekly stats table shows we are 12% and 15% down on last week for lamb and mutton respectively, and over 30% on this time last year.
The late run of old lambs appears to be clashing with some maintenance closures of processors. While there were more sheep and lambs killed in the week ending (figure 2), numbers were still 14% below then peaks seen in May and June.
The timing and magnitude of the price fall looks eerily similar to that of 2020. Figure 2 shows a dramatic drop in late July in 2020, but this was driven by weakening export demand, with supply still very tight.
This year it is supply overwhelming slaughter capacity, and it should be a short term impact. Providing lamb and mutton export prices remain strong, processors should be making more money, and this should encourage increasing slaughter space. Obviously this depends on labour and ability to ship product, both proving bottlenecks in the supply chain at the moment.
The week ahead….
New season lambs are just around the corner, and the old season flush should soon be over. This should equate to a price bounce, and we can see even in 2020 it came relatively quickly. It’s not time to adjust the budget for this year’s sales just yet.
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Data sources: MLA, Mecardo
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Independent analysis and outlook for wool, livestock and grain markets delivered to you as it’s published
Listen to the podcast
Join the Mecardo team for the Commodity Conversations podcast, where we provide short weekly market recaps and longer conversations with guests to discuss the drivers and trends in livestock, grain and fibre markets.
MEET THE TEAM
Our team of market analysts are recognised as leaders in Australian Ag market analysis, providing invaluable insights to help you navigate the ever-changing commodity landscape.
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We don’t just bring you the most up to date market insights. Find out more about Mecardo’s services including risk management advisory, modelling, benchmarking, research & consultancy.