Supplies ramp up and prices do the opposite

Flock of sheep in dry paddock

New season sucker lambs are coming to the fore in NSW, and processors have also powered through the week. With the number of lambs yarded last week breaking a record for August, prices were bound to fall.

The yardings figures show a lift in throughput in east coast yards of 17% to see 208,533 lambs yarded. This is the largest weekly lamb yarding in the month of August as far back as our records go. All states contributed to the lift, but NSW was the big driver where an additional 24,520 lambs were yarded compared to the week before.

New season lamb numbers have jumped in a number of key NSW yards. Total east coast lamb yardings for the week ending the 6th of August were 50% higher than the five-year seasonal average. Sheep throughput also increased to 56K head, which was 28% below the five-year seasonal average as strong prices continue to draw out stock.

Processors really ramped up slaughter last week with an additional 28K head of lambs processed compared to the week prior. Looking at the combined sheep and lamb slaughter levels for the week, the total was 4% higher than the five-year average, and 19% more than the same week last year.

As typically happens with added supply, prices fell across most categories. The Eastern States Trade Lamb Indicator held its ground though, as old trade lamb supplies thin out, posting a 1ȼ lift on the week to 891ȼ/kg cwt. In the West, trade lambs were cheaper this week, falling 24ȼ to 729ȼ/kg cwt. This places the indicator 25ȼ below the same time last year.

Merino lambs dropped 42ȼ over the week to 751ȼ and light lambs lost 28ȼ to 775ȼ/kg cwt. Heavy lambs received more support with the National Indicator dropping 12ȼ to 915ȼ/kg cwt, which is 284ȼ higher than the same time last year.

With the broader lamb market falling for two weeks in a row now, mutton was dragged down in the process. The National Mutton Indicator ended this week 43ȼ lower, at 647ȼ/kg cwt.

The week ahead….

Given the stark jump in supply last week, the price fall is justified. The question is now turning to what numbers of lambs are on the ground and when will we see them hit the market. Indications are pointing to more lambs for slaughter in late winter and early spring this year.

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Data sources: MLA, NLRS, Mecardo

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