Lamb markets continued to soften in the east this week while in Western Australia they are moving to the beat of their own drum. Finished lamb prices continue to rally in the west, with producers this week enjoying higher returns than in the east.
The Eastern States Trade Lamb Indicator (ESTLI) ended the week at 838¢/kg cwt which was 11¢ lower than the week prior and 13¢ up on the same time last year. In the West, the trade lamb Indicator gained 32¢ over the week, pushing up to 851¢/kg cwt. It’s the first time since August 2020 that the WA trade lamb indicator (WATLI) has been higher than the ESTLI.
Results were mixed in NSW, with light and Merino lambs well sort after. It was further South in Victoria and South Australia that really dragged down the market. Merino lambs were 98¢ lower on the week in Victoria, while Restocker lambs were 35¢/kg cheaper.
No matter which eastern state you look at though, mutton took a significant hit this week. The National Mutton Indicator dropped 45¢ to 575¢/kg cwt. It’s likely that processors are prioritising lambs in their kill while labour availability remains an issue and the peak in domestic lamb demand is here.
The lambs slaughter figures for last week tell the story of continued constraints in slaughter capacity. While east coast lamb slaughter lifted 44% on the week prior, the 273,309 head of lambs processed was 15% fewer than the same time last year and 26% below the five-year seasonal average. East coast sheep slaughter was 32% lower than the same week in 2020 and 51% below average levels.
The week ahead….
All National lamb indicators continue to trade at levels higher than 12 months ago so despite the disruption, lamb markets are holding well. We usually see demand weaken post the Australia Day demand peak and prices soften, but it might not be so obvious this year while retailers try to get products on shelves while supply is constrained.
Back to business, and the saleyards have seen stock flood the yards. The sharks were circling as the mutton momentum continued. Indicators took the elevator
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The West is doing fine on its own
The Eastern States Trade Lamb Indicator (ESTLI) ended the week at 838¢/kg cwt which was 11¢ lower than the week prior and 13¢ up on the same time last year. In the West, the trade lamb Indicator gained 32¢ over the week, pushing up to 851¢/kg cwt. It’s the first time since August 2020 that the WA trade lamb indicator (WATLI) has been higher than the ESTLI.
Results were mixed in NSW, with light and Merino lambs well sort after. It was further South in Victoria and South Australia that really dragged down the market. Merino lambs were 98¢ lower on the week in Victoria, while Restocker lambs were 35¢/kg cheaper.
No matter which eastern state you look at though, mutton took a significant hit this week. The National Mutton Indicator dropped 45¢ to 575¢/kg cwt. It’s likely that processors are prioritising lambs in their kill while labour availability remains an issue and the peak in domestic lamb demand is here.
The lambs slaughter figures for last week tell the story of continued constraints in slaughter capacity. While east coast lamb slaughter lifted 44% on the week prior, the 273,309 head of lambs processed was 15% fewer than the same time last year and 26% below the five-year seasonal average. East coast sheep slaughter was 32% lower than the same week in 2020 and 51% below average levels.
The week ahead….
All National lamb indicators continue to trade at levels higher than 12 months ago so despite the disruption, lamb markets are holding well. We usually see demand weaken post the Australia Day demand peak and prices soften, but it might not be so obvious this year while retailers try to get products on shelves while supply is constrained.
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Data sources: MLA, NLRS, Mecardo
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Independent analysis and outlook for wool, livestock and grain markets delivered to you as it’s published
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.
MEET THE TEAM
Our team of market analysts are recognised as leaders in Australian Ag market analysis, providing invaluable insights to help you navigate the ever-changing commodity landscape.
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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.