Wintery yarding push indicators lower

Indicators all dropped again this week, and the winter price gains have all been retraced now in line with typical seasonality. The Eastern States Trade Lamb Indicator is sitting at 1172¢/kg cwt, a 2% week on week decline.  The National Mutton Indicator (NMI) dropped 5% week on week to 817¢/kg cwt.  

Per MLA saleyard reports the general consensus was that the prevailing winter trend of trade lamb scarcity persisted. Restockers took a backseat this week and were typically more conservative. Across the main yardings this week, Forbes saw an uptick in numbers and interest in the available new season lambs, similarly Wagga saw stronger numbers dominated by heavy weight lambs. Interest in mutton at Dubbo tapered off this week.  The weight and quality of lambs was down in Hamilton this week and so to the buyer interest.

Slaughter picked up last week slightly but the ceiling before spring is well under 500k head.  It will likely be months before we eclipse this number again.  This should provide a bit of support shortly for falling indicators.  The scarcity of stock will see a floor appear, and the decline of the winter premium should keep some lighter poorer quality lambs home instead of entering the fray at the yards.  

On Mecardo this week, Jamie Lee-Oldfield gave an update on the impact of lower Australian supply on export performance (read more here). Australia’s mutton exports fell more significantly in July, to the lowest monthly volumes since 2011 but reassuringly, has not outpaced the drop in supply, suggesting demand remains robust despite much higher cost YoY.