Mecardo Tale of two supply streams

Right now, the lamb market is heading in a few different directions. On one hand trade lambs are abundant which is dragging the price down. Store lambs and mutton are also plentiful, and demand is uninspiring. But on the other, heavy lambs supply is tighter and holding prices steady.

The Eastern States Trade Lamb Indicator (ESTLI) lost 11¢ over the week to 639¢/kg cwt. In Western Australia trade lamb prices also came under pressure, losing 16¢ to 502¢/kg cwt. As reported in this week’s analysis (read here) the overflow of trade lambs is a result of the wet conditions.

Heavy lamb prices held steady on last week’s levels, with the National Heavy Lamb Indicator sitting at 688¢/kg cwt. Tight supply of well-finished lambs over 26kg is keeping prices elevated relative to trade lambs.

Restocker lamb prices bounced this week, with the National Restocker Lamb Indicator up 64¢ to 517¢/kg cwt. Given the scale of the price falls over the last few weeks though, restocker lambs are still around 20¢ cheaper than four weeks ago. The Merino lamb market also found momentum, with the National Merino Lamb Indicator picking up 50¢ to 540¢/kg cwt.

The Mutton market traveled sideways this week and appears to have found a level. At 438¢/kg cwt, the National Mutton Indicator is 66¢ higher than four weeks ago and 130¢ below the same time last year. In WA mutton is priced around 215¢ or 48% lower than in eastern states, due to the lack of kill space being reported in WA.

The overflow of lambs is showing up in the saleyard throughput figures. Early yardings reports for this week are already showing over 191K lambs yarded nationally. The five-year average for this point in the season is 169K lambs. Supply of sheep to the yards also remains elevated, with over 110K sheep yarded nationally this week (reported so far).

The ANZAC Day holiday saw weekly slaughter dip last week but this is expected to be short-lived.

The week ahead….

North of the divide many growers are waiting on rain and looking for feed while there is general comfort in the season in the south. There doesn’t look to be much on the forecast for the week ahead, so we’re unlikely to see supply pull up significantly.