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Supermarket Coles comes out with 680c/kg for June lamb deliveries

by Terry Sim, 12 April 2017

SUPERMARKET Coles has released its second monthly winter forward contract for lambs, offering a minimum June price of 680c/kg for 18-26kg shorn lambs delivered to Colac in Victoria and Gundagai in New South Wales.

The June price follows Coles’ May forward contract of 670c/kg, which has been closed off.

Coles’ June contract also includes an upside clause, whereby the company will increase its price by 50 percent of the amount that the Coles weekly spot price grid price exceeds the contracted price.

The supermarket will only purchase lines of lambs of 200 head or more and lambs must a maximum fleece length of two inches (5cms) no more than 15 weeks prior to delivery. Grass seed contamination and overweight discounts apply, and the company reserves the right to inspect lambs before delivery.

Elders Bendigo livestock manager Nigel Starick said the forward contracts available for winter lamb prices augured well for producers who still had lambs to sell. About two thirds of lambs were currently being consigned lambs to saleyards and the remainder were going director to abattoirs; however, Mr Starick said lamb supplies were becoming tighter.

“There are not a lot of spring-drop lambs left and most of our lambs are cutting their teeth.

“It is hard to secure lambs right now.”

He expected it will be difficult for restockers, and domestic buyers and exporters to secure lambs before the spring lamb flush started in August.

“They are just not there.”

At least one exporter has released a spot price of 650c/kg for next week and other companies are due to review their forward pricing after Easter.

Mr Starick said he hoped the domestic and export abattoirs currently buying lambs were able to continue at current price levels.

“Hopefully they don’t shut down, that’s the only thing that concerns us, but I think we have gone past that point.

“I think if it was going to happen it would have happened by now.”

He expected the first 2017-drop lambs to be marketed in Bendigo in August, but NSW producers might have earlier lambs.

“There have been quite a few February-drop lambs.”

Click here to review the Coles June forward lamb contract.

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