Sheep settle while the dollar drives ahead

Sheep in field

Sellers returned to the market this week, cautiously observing the price improvements from the previous week. They encountered mixed price directions, albeit with relatively milder fluctuations compared to the volatile swings that have become commonplace. This moderation in price movements provided some respite for market participants.

In the Eastern States, the Trade Lamb Indicator experienced a decline of 7¢, settling at 548¢/kg cwt. This downward pressure was primarily attributed to an increase in the throughput of trade lambs. Conversely, the Trade Lamb Indicator in the West remained relatively stable at 495¢/kg cwt.

Interestingly, heavy lamb prices exhibited divergent trends in different regions. Victoria recorded a notable gain of 21¢, reaching 598¢, while South Australia experienced a lift of 40¢. In contrast, New South Wales witnessed a 20¢ decline due to reported weaker competition.

The National Restocker Lamb Indicator observed a decrease of 13¢, reaching 397¢/kg cwt. Notably, New South Wales played a significant role in this decline, with restocker lambs losing 57¢ and settling at 357¢/kg cwt. On the other hand, the National Merino Lamb Indicator increased by 10¢, concluding the week at 433¢. Light lamb prices remained relatively stable throughout the week, with prices hovering around 453¢/kg cwt.

At a national level, mutton prices displayed a modest increase of 3¢ over the week, reaching 335¢/kg cwt.

Analyzing the saleyard throughput figures from last week, it was evident that producers were holding back. The national yarding of lambs stood at 121k, while sheep numbered only 31k. These figures marked the lowest saleyard throughput week since the Easter holiday period in April. However, this week witnessed an increase in both lamb and sheep numbers, which explains the price pressures observed in certain categories. Notably, New South Wales witnessed a substantial 37% week-on-week jump in lamb throughput.

National lamb slaughter for the week ending July 7th decreased by 2% compared to the previous week. Nevertheless, the current numbers indicate a 14% increase in lamb processing compared to the same period last year. Interestingly, a significant shift was observed in sheep slaughter. Nationally, approximately 70,000 sheep were processed last week, which represents a decrease of over 50% from the previous week and aligns more closely with the average levels for this time of the year.

Next week

The Australian Dollar (AUD) exhibited a strong rally against the US Dollar (USD). Starting the week at 0.67 US¢, the AUD reached 0.689¢ by Thursday. This currency movement will be closely monitored in the coming weeks, as a sustained rally could potentially impact the attractiveness of Australian sheepmeat for importers, making it relatively more expensive.

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Data sources:  MLA, Mecardo

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