Despite another drop in throughput, the lamb and sheep market this week was showing signs of supply fatigue in what has been a red-hot start to the year.

On the East Coast, combined lamb and sheep yardings for the calendar year to date have already exceeded 2 million head which is significantly higher than the start of any season in the last decade, (2018 was the next highest at 1.67 million head).

Even with favourable export market fundamentals and an improving outlook from weather to interest rates, this level of recent throughput is always going to cause short-term downward pressure on pricing. Despite a relaxation of numbers this week, pricing still took a tumble; there is just plenty of stock to choose from at the moment for restockers and processors alike.

Based on preliminary reports from MLA, this week’s yarding was still 28% higher than the 5-year average for this sale week.  East Coast Sheep yardings fell 24% WoW but did little to alleviate shifting demand for mutton as the National Mutton Indicator lost  72ȼ to sit at 210 ȼ/kg cwt, essentially repealing the gains of the last month.

After a gigantic yarding last week in Tasmania, yardings on the Apple Isle returned to the usual operating level which contributed to the 8.3% reduction WoW in lamb yardings on the East Coast. Eastern States Trade Lamb Indicator (ESTLI)  still lost 43 ȼ (-7% WoW) to 639 ȼ/kg cwt.

Saleyard reports in NSW and Victoria noted that significant buyers were less inclined to bid or were not present altogether.  Finished lamb pricing declined again as a result as the National Heavy Lamb indicator losing  47 ȼ to settle at 648 ȼ/kg cwt.  

Next week

Processor demand has been strong as Figure 2 shows, but at this level of supply, short-term competition from the processing sector will likely be opportunistic as opposed to a given.

Numbers to the yards will need to continue to retreat to 5-year average levels to normalise pricing for lamb markets.

Have any questions or comments?

We love to hear from you!

Click on graph to expand

Click on graph to expand

Click on graph to expand

Data sources: MLA, Mecardo

Make decisions with confidence- ask about our board packs, bespoke forecasting and risk management services

Have any questions or comments?

We love to hear from you!

Want market insights delivered straight to your inbox?

Sign up to the mailing list to get regular updates to new analysis and market outlooks

Independent analysis and outlook for wool, livestock and grain markets delivered to you as it’s published

Commodity conversations podcast cover image, a illustration of a sheep standing on a cow's back with grain either side
Listen to the podcast

Join the Mecardo team for the Commodity Conversations podcast, where we provide short weekly market recaps and longer conversations with guests to discuss the drivers and trends in livestock, grain and fibre markets.

Photo of a farmer surrounded by Merino sheep in dusty yards
Research: Analysis of the Australian sheep flock

In this report for LiveCorp and MLA, we analysed the historical trends in the demographics of the Australian sheep flock, examining domestic factors that influence farm-level enterprise decision making. 

Image of harvested grain pouring into a chaser bin

We don’t just bring you the most up to date market insights. Find out more about Mecardo’s services including risk management advisory, modelling, benchmarking, research & consultancy.