Markets

Australian Lamb Company pitches first forward contract prices

Terry Sim April 5, 2017

LAMB exporter Australian Lamb Company has released a winter forward contract of up to 660c/kg cwt for 18-32kg crossbred and Dorper lambs, delivered from May to July, with lower discounts on heavier lambs.

However, ALC livestock manager Ben Verrall said contract lamb numbers will be limited and the contracts could close without notice.

“The amount I am going to take is very limited and I could shut a week out very soon.”

The ALC contract price for 18-32kg crossbred and Dorper lambs is 650c/kg in May, rising to 660c/kg for June and July delivery to the company’s Colac plant in Victoria.

The 32.1-36kg price for crossbreds and Dorpers in 600c/kg in May, lifting to 610c/kg in June and July.

Crossbred and Dorper lambs weighing 36.1kg-plus are priced at 550c/kg in May, rising to 560c/kg in June and July.

Merino, Dohne and SAMM lambs in the grid ranges are priced at 40c/kg below the crossbred-Dorper rates. Stock with seed infestation will be discounted up to 100c/kg. Other curfew, NVD and MSA notification conditions apply.

Mr Verrall said the 32.1-36kg grid prices represented a 20 cent lower deduction – 70 cents to 50 cents — on the 18-32kg rates. The same reduced 20 cent discount also applied between the 32.1-36kg and the 36.1-plus grid.

He said he had put the forward price schedule out to give vendors the chance to lock in lambs and to give them confidence to buy store.

“They (store lambs) are pretty hard to get hold of, but at least now they can buy them confidence and lock a few away.

“It is more so to give the vendor some confidence that they are going to get a return.”

Mr Verrall said the contract was released to the trade on Monday afternoon this week. He expected the higher weights in current consignments to continue into winter, with producers having plenty of pasture feed and grain available.

Due to the tighter supply situation and current price levels, ALC’s Colac plant was back about 30pc in production from the previous spring’s peak. Mr Verrall expected the company might have to limit winter production with some shift shutdowns during winter.

Click here for the full ALC winter lamb forward contract and booking details.

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