Prices slipping despite the positive outlook

Sheep transport vehicle

Despite an encouraging price outlook for late Autumn and Winter, the market continues to slide lower. It isn’t surging saleyard throughput that’s to blame. The number of lambs and sheep yarded over the last two weeks has been below five-year average levels. However, the number of stock going to processors is ample for the time being and it’s allowing prices to ease.

The Eastern States Trade Lamb Indicator (ESTLI) lost 19¢ over the week, falling back under the 600¢ mark to 593¢/kg cwt. Trade lamb supply was slightly stronger in what was reported as a volatile market. In WA, trade lamb prices also took a hit, dropping 46¢ to 455¢/kg cwt.

Restocker presence in the market has dried up in recent weeks, in tandem with the season. The National Restocker Lamb Indicator has fallen 120¢/kg cwt, or 19% since the beginning of February. It’s currently sitting at 508¢/kg cwt which is 7¢ above the same time last year. Wagga had the largest yarding again of restocker lambs this week, with a lift in supply driving prices lower.

The year-on-year price change of finished lambs versus restocker lambs paints an interesting picture of the change in dynamics this season. Trade and heavy lamb prices are currently sitting at 15% and 13% lower than this time last year. That’s despite a tighter supply outlook. Restocker lambs however are sitting 1% higher year-on-year.

A decline in saleyard mutton throughput lent to some stability in price in the face of a generally weaker market. The National Mutton Indicator is sitting at 221¢/kg cwt, which is 85¢ lower year-on-year. 

Next week

Forward contracts released for late autumn and winter point to plenty of upside for prices compared to current saleyard values. Tightening lamb supply gradually starts from this point in the season if you look at history, however, we will need to see rain on the ground first.

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Data sources: MLA, Mecardo

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