We looked into what’s happening with supply in yesterday’s analysis (view here) and found that sheep and lamb slaughter is tracking around 30% lower than last year. Restricted processing capacity and the weaker market we’ve seen in the last few weeks has some producers opting to keep lambs in the paddock longer than they may have otherwise.
While 197,477 head of lambs were yarded in the east in the week ending the 21st of January, saleyard reports suggest that this week lamb offerings were very limited. Adding a public holiday into the mix, buyers were comfortable jumping in to secure stock and push up the price.
Trade and restocker lambs were most improved for the week. The Eastern States Trade Lamb Indicator (ESTLI) lifted 37¢ to 875¢/kg cwt and the National Restocker Lamb Indicator gained 32¢ to 948¢/kg cwt, with both indicators sitting higher than the same time last year. Heavy lamb prices lifted in all states bar Victoria which saw an overall increase in the National Heavy Lamb Indicator of 12¢ to 854¢/kg cwt.
After the heavy correction in the price of mutton over the last few weeks, mutton did find some support this week. The National Mutton Indicator gained 7¢ to 582¢/kg cwt, 21¢ below the same time last year.
The week ahead….
The Australian dollar dropped 2.1% over the week which should help attract more interest from overseas customers of our export product. Both the ESTLI and NMI in USD terms are currently cheaper than this time last year, and at the lower end of the range for the past 12 months. The market is really hinging on the capacity of processors at the moment but this week has shown that producers will sit back and wait while there’s still feed in the paddock for more stability in price.