Indicators were a mixed bag this week (see Indicator Table). Restocker lamb indicators experienced the steepest decline, down 29c to 1189c/kg cwt and Heavy lambs bounced back 33c to 1168c/kg cwt. The Eastern States Trade Lamb Indicator (ESTLI) rose 19c to 1264c/kg cwt and Trade Lambs in WA lost 25c to 1111c/kg cwt.
Per MLA saleyard reports Wagga and Hamilton both saw a more inconsistent offering this week with weight and quality variable across the lambs offered. Premiums and competition were still present for grain finished stock. Forbes saw fewer lambs but a strong showing weight and quality wise kept the market elevated and finished lambs hit a new high tide mark in Carcoar at $430/head. The National Mutton Indicator (NMI) finished 2c higher to 918c/kg cwt.
The winter slaughter slide is in full effect, with last weeks combined lamb and sheep slaughter still below 400K head with shutdowns and supply tightness in full effect. It’ll be up and down until the spring flush which in the current market will likely see the premiums continue for grainfed lambs to keep productivity up.
As discussed on Mecardo this week, the lack of numbers has filtered through to exports all year, but demand remains robust (read more here). The US has taken 39% of exported lamb volumes and China 32%. Volumes have also increased into the EU and UK year on year. The developed economies are best placed to absorb more expensive lamb and with Australia continuing to dominate global production, customers are hard pressed to find alternatives.
As long as US consumers continue to demand sheepmeat, then the US will continue to have a strong reliance on Australian imports as their domestic production struggles with supply. Per Steiner Group US production is down 18.9% YoY and producers are opting to slaughter stock as soon as they are market ready (limiting production weight) due to challenging drought conditions and strong prices. Similar to the 2024/25 season in Australia, mature sheep are running for the exit, and lighter lambs are dominating available supply.
Winter weight watchers
Next week
Middle East tensions have returned, potential volatility for Australian light lambs could be on the cards.
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Data sources: MLA, Mecardo
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