Flock of young lambs and sheep in paddock in NSW

Last week’s combined slaughter figures for Sheep and lamb were another high point for the year and were 51% higher year on year. While this level of supply is impacting the pricing across the country, buyers in southern markets look to be in pursuit of quality stock at more affordable prices, offering some respite from the downward price trend.

The National restocker indicator held firm at 279¢/kg cwt, a 1¢ reduction from last week, with the state-level markets offering an indication of where confidence in the feedbase is stronger. NSW restockers lost 43¢ to sit at 252¢/kg cwt after a 34% week-on-week increase in throughput. Whereas the Victorian restocker indicator increased 24¢ to 337¢/kg cwt despite a 45% increase in yardings this week. Similarly, South Australian restocker yardings doubled this week, and the indicator still rose 22¢ to 285¢/kg cwt.

On Mecardo this week, Angus Brown investigated how the inversion of the lamb market with supply pressure and a drier outlook has seen the market turn to favour the finisher.  This week’s results in the restocker market indicate that some restocker buyers might have identified similar trade opportunities for their own enterprises.

The national mutton indicator increased 2¢ to 106¢/kg cwt this week. With the NSW and Victorian price movements balancing themselves out (NSW improved 10¢ to 112¢/kg cwt and Victoria declined 9¢ to 104¢/kg cwt). West Australian Mutton declined 26¢ to 87¢/kg cwt despite an 8% week-on-week decline in sale yard throughput. Supply pressure of the preceding weeks is the likely driver, as September monthly mutton yardings in WA (21K) were 77% higher year on year (12K).

The Eastern States Trade Lamb Indicator (ESTLI) fell 7¢ to 431¢/kg cwt, a 2% week-on-week decline. September throughput for East Coast trade lambs (208K) was 10% higher month on Month (189K) and 5% higher year on year(195K). In 2022 September throughput increased 1% from the previous month. West Australian Trade Lamb Indicator finished 17% higher week on week to 389¢/kg cwt, a 56¢ improvement; driven by a 37% decrease in trade lambs through the yards this week.

Next week

Figure 2 shows the month-to-date total rainfall for September and whilst the narrative has been about the drier outlook, some regions have seen a top-up of rain which might instil confidence. Further rainfall is needed to really lend support to the trade.

Producers that do take on stock will offer some support to pricing in certain specifications. For a recovery in pricing for the industry overall, an uptick in export demand for lamb and mutton will be required as we approach summer to assist with absorbing the volumes coming out of the processors.

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Data sources: MLA, BOM, Mecardo

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