Sheep in pen closeup

It was a disappointing week on multiple fronts for our friends in Victoria. A cheaper market from the get-go set the tone for the week, with large price falls in the south. Not all the usual buyers have been active in the market and the slaughter numbers are reflecting reduced processor activity.

The Eastern States Trade Lamb Indicator (ESTLI) drove back to its recent bottom, ending this week at 514¢/kg cwt after dropping 6%. The ESTLI is currently 32% or 238¢ below the same time last year. This week’s fall was driven by a much cheaper market in Victoria, where trade lambs were 81¢ cheaper week on week. In the West, trade lambs bucked the trend pushing 40¢ higher to 536¢/kg cwt.

Heavy lamb prices fell in all states this week, driving the national indicator to a new low for the year down 32¢ on last week to 512¢/kg cwt. Saleyard reports in NSW noted some good numbers and quality of trade and heavyweight lambs.

Light lambs returned to the lows of late June, losing 63¢ this week to end at 389¢/kg cwt. This Is down 40% or 258¢ year on year. The National Merino Lamb Indicator dropped 36¢ over the week to 397¢/kg cwt, which is 214¢ or 35% lower than the same time last year.

Mutton has held reasonably steady over the last two weeks. The National Mutton Indicator fell just 4¢ over the week to 333¢/kg cwt, sitting at the same level as a month ago.

Not all processors have been operating at saleyards with some running winter maintenance. The slaughter figures illustrate this with total sheep and lamb slaughter nationally for the week ending the 14th of July almost 145,000 head lighter than the fortnight prior. However even with the decline, slaughter rates are maintaining above average levels for this point in the season. A drop in mutton slaughter in all states has been the main driver over the past few weeks, but lamb slaughter numbers have also dropped slightly in Victoria.

Saleyard throughput continued to climb for both sheep and lambs this week. NSW saw a large lift in both lamb and sheep yardings which pressured the market. However, lamb and sheep throughput numbers in the east over the last four weeks have been below average levels.

The week ahead….

This point of the year typically marks the low for slaughter, with weekly volumes climbing from here. Last year we saw the tail end of old lamb supply dry up around now, with a few weeks’ relief before early new season supply started trickling in. There should be some price support in August if the same trend occurs.

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Data sources: MLA, Mecardo

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