Spirits dampened by another cheaper market

sheep and lambs in yard

Rain may have kept some lambs away from the saleyard, but this week buying interest was weak for the quality and weights on offer. Additionally, the market was burdened by wintry lambs in the southern regions, resulting in price indicators hitting their lowest points since 2013/14.

The Eastern States Trade Lamb Indicator (ESTLI) experienced another downward slide, falling by 25¢ to reach 523¢/kg cwt, marking a 32% decline compared to the same period last year. In the West, the previously rising price trend came to a halt as trade lamb prices dropped by 49¢ over the week, settling at 473¢/kg cwt.

Heavy lamb prices are heading closer to the low of 2020. The National Heavy Lamb Indicator dipped by 35¢ to 530¢/kg cwt, albeit still maintaining a slight premium over trade lambs. The Wagga saleyard report highlighted reduced numbers, yet both export and domestic buyers displayed selectiveness during bidding.

Store lamb prices experienced a drop below the levels witnessed in early June. The National Restocker Lamb Indicator plunged by 78¢, concluding at 354¢/kg cwt, a level not seen since the end of 2013. Restockers faced lower prices in all states except for Western Australia, which observed an 18¢ increase. In South Australia, the restocker lamb indicator settled at 328, while in Victoria it stood at 356¢/kg cwt.

Light lamb prices also sank below the recent low, with the national indicator finishing the week at 397¢/kg cwt, marking a substantial 42% decrease compared to the previous year. Mutton prices followed suit, shedding a further 16¢ to end the week at 317¢/kg cwt in a market that exhibited erratic behaviour.

Many saleyard reports highlighted a significantly lighter yarding this week, partly attributed to the rain and the difficulties involved in moving stock. Preliminary reports suggest that lamb numbers reached around 134,000 head nationally, while sheep numbered around 47,000—an overall decline of 25% for lambs and 36% for sheep compared to the previous week.

Nonetheless, processors continue to operate at exceptionally high levels, as indicated by the latest reported slaughter figures for the week ending June 23rd. National lamb slaughter surpassed the five-year seasonal average by 15%, while sheep slaughter increased by 45%, showing substantial growth compared to the previous week.

Next week

It’s that time of year when processors typically shut down for maintenance which often introduces a bit of volatility in the market. The rain over-delivered on the forecast promise for June this week, and some of the patches that missed out, like northern NSW, are tipped to receive it in the week ahead. The longer-term BOM outlook is now showing a closer-to-average July for the south-east, but a drier August. However, the recent rain should help extend the feed supply into spring.

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Data sources: MLA, Mecardo

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