Markets

Heavy lamb prices reach record levels as domestic and export processors battle

Terry Sim, June 29, 2016
These mid-March shorn September-October drop Merino wether lambs, 12.3kg cwt and mostly score 1, sold for $90 at Wakool in NSW's Riverina on AuctionsPlus yesterday.

These mid-March shorn September-October drop Merino wether lambs, 12.3kg cwt and mostly score 1, sold for $90 at Wakool in NSW’s Riverina on AuctionsPlus yesterday.

HEAVY lambs reached record carcase weight price levels early this week as demand from domestic and export processors continued despite a lift in saleyard supplies in New South Wales.

On Monday, the National Livestock Reporting Service’s Eastern States Daily Indicator for heavy lambs rose 8 cents to 652c/kg and then another 8 cents to 660c/kg on Tuesday, up 41 cents week-on-week and well above the previous record of 646c/kg in February 2011.

At Tamworth on Monday, heavy lamb prices rose by up to $20 and at Dubbo, heavy lines sold from $160-$178 and extra heavyweights made $170-$226 at 643-681c/kg. At the South Australia Livestock Exchange on Tuesday, heavy lamb prices rose by up to $19 to $210 and extra heavies made to $212, but were below NSW’s cwt prices.

Extra heavy lamb prices of up to $223-$230 in New South Wales weren’t quite equalled in Victoria, with only a few quality heavy and extra heavy lines making more than $200. In all states, more lambs in all slaughter categories are making above 650c/kg cwt, with many over 700c/kg in the light and trade weight pens. In NSW, the trend above 700c/kg has continued into the heavy lamb category.

Driving the heavy lamb rates is the overall tighter quality supplies, limited direct sales and strong domestic demand for any well-finished lambs 20-28kg that are also suitable for export processors.

Lamb supplies short around Dubbo

Dubbo agent Cleve Olsen said supplies of heavy lambs were short in the region and there weren’t many further south either. Dubbo agents drew for 27,000 and yarded 23,000, though this was an increase of 9795.

“Later on there probably will be a few about, but at this point in time there is a generally short supply of sheep and lambs.”

Export demand was still strong but up to $226 for good lambs was “plenty of money”, he said.

“They haven’t been paying that money all the year and you will find they have probably got caught out.

“I don’t believe that anybody knows what’s out there, but I don’t believe they are in our region,” Mr Olsen said.

“I think the lambs are definitely in short supply and especially the right article.”

Mr Olsen said the “window of opportunity for very top money” was very short and had been helped by rain this year.

“If only meat companies could understand that if they could give a grower a fair dinkum idea of what they will paying in June and July….”

Mr Olsen believed the forward contracts put out for July-August would need to be adjusted if processors wanted to get lambs, with lambs making more than 700c/kg cwt.

MLA market information manager Ben Thomas said the surge in lamb prices was all on the back of shortening availability and strong producer confidence after the widespread rainfall throughout May and June.

“Lamb supplies are expected to remain lower than year-ago levels throughout the winter months which should support prices, before the usual seasonal flush in spring.”

The ESDI for trade lambs rose 10 cents on Monday and then 4 cents to 647c/kg on Tuesday, but is still below the indicator record of 671c/kg set in March 2011. The Merino lamb indicator rose 7 cents to 590c/kg on Tuesday, and the light lamb indice lifted 2 cents to 610c/kg.

Mutton prices were firm to up to $20 cheaper in NSW, mostly on quality and helped at times by fleece values, but rates were firm to up to $10 dearer in Victoria. After Tuesday’s sales, the ESDI for mutton fell 3 cents to 413c/kg cwt, and the national mutton indicator closed on 412c/kg, also down 3 cents. The current ESDI for mutton is well below the March 2011 record of 481c/kg.

Over-the-hook rates lift dramatically

NSW and Victorian processors lifted over-the-hook lamb rates dramatically this week in an attempt to flush out direct supplies. Rates for Merino lambs lifted the most, from 20-37c/kg.  In New South Wales, the NLRS said over-the-hook lamb indicators for trade and heavy weight lambs were up to 620c/kg cwt. Mutton rates remained stable, with tight supply a factor.

NSW’s OTH rates for 2-4 score lambs are: 18-24kg, 580-620c/kg, up 12 cents; 24-26kg+, 570-620c//kg, up 14-17c; Merinos 16-22kg, 510-590c/kg, up 20c. The sheep rates are: 14-18kg, 330c/kg; 18-24kg, 340-380c/kg; 24kg+, 350-400c/kg.

In Victoria, the NLRS said most lamb over-the-hook indicators moved higher this week, with trade weights up 13c/kg on average to 627c/kg cwt. Mutton indicators were unchanged, with medium weights averaging 353c/kg cwt.

Victoria’s OTH rates for 2-4 score lambs are: 16-20kg, 620-640c/kg, up 13-20c; 20-22kg, 620-640c/kg, up 13c; 22-24kg, 600-620c/kg, up 10c; 24-26kg, 580-600c/kg, up 10c; 26kk+, 580c/kg, no change; Merinos 16-22kg, 560-580c/kg, up 37c. The sheep rates are: 14-18kg, 320-340c/kg; 18-24kg, 340-370c/kg; 24kg+, 300-360c/kg.

In South Australia, the NLRS said over-the-hook lamb indicators were unchanged on week-ago levels, with trade weights averaging 610c/kg cwt. Mutton indicators were also steady week-on-week, with medium weights averaging 348c/kg cwt.

South Australia’s OTH rates for 2-4 score lambs are: 16-18kg, 600c/kg; 18-24kg, 600-620c/kg; 24-26kg, 580-600c/kg; Merinos 16-22kg, 560c/kg. The sheep rates are: 14-18kg, 300-380c/kg; 18-24kg, 320-380c/kg; 24kg+, 360c/kg.

In Tasmania, the NLRS quoted the over-the-hook rates for sheep and lambs as unchanged. Tasmania’s OTH rates for 2-4 score lambs are: 0-16kg, 530-560c/kg; 16-24kg, 540-560c/kg. The sheep rates are: 0-14kg, 270-300c/kg; 14-18kg, 280-300c/kg; 18-24kg, 280-310c/kg; 24kg +, 270-290c/kg.

This week’s NLRS OTH quotes for Western Australia were not available when this article was published.

Dubbo lambs to $226

In New South Wales at the Dubbo saleyards on Monday, the agents yarded 23,000 lambs, 9795 more than last week, and 5500 sheep, 1332 fewer.

The NLRS said lamb quality was good, with plenty of heavy and extra heavy lambs. Trade weights in good condition were limited and there were good numbers of store and light processing lambs available. All the usual buyers operated in a dearer market.

Light restocking lambs ranged from $52-$93. The 2 score processing lambs gained $3 to $72-$118. Medium and heavy trade lambs were $4-$5 dearer at $122-$166. Heavy lambs sold to increased competition and gained $6-$11 to $155-$187. Carcase prices ranged from 630-670c/kg. Extra heavy lambs topped at $226. Trade weight Merino lambs sold from $98 and heavier lambs made to $168.

Sheep quality was again mixed, with fewer heavy lines. Merinos with longer wool sold dearer and plainer crossbred ewes were firm. Medium weights sold from $74-$129. Heavy Merinos made to $160. Most sold from 380-440c/kg cwt.

Corowa’s trade lamb prices lift $6-$9

At the Corowa saleyards on Monday, the agents yarded 13,300 lambs, 3100 more than last week, and 4700 sheep, 400 fewer.

The NLRS said lamb quality was mixed, but there were some excellent pens of extra heavy lambs. The usual buyers competed strongly for trade lambs, lifting prices $6-$9.

Light trade lambs made $116-$138. Medium trade lambs sold from $129-$161. Heavy trade sold from $155-$174 and averaged 645c/kg cwt. Heavy lambs made from $164-$185 and extra heavy lines sold for $176-$230. Heavy Merino lambs made to $175. Lambs sold to restockers and feeders sold from $70-$128.

Sheep quality was not as good this week and competition was subdued. Crossbred ewes 18-24 kg cwt sold up to $20 cheaper, making to $138, while heavy Merino ewes sold to $165, hoggets to $164 and wethers to $134.

Tamworth lambs up to $20 dearer

At the Tamworth saleyards on Monday, the agents yarded 1550 lambs, 950 fewer than last week, and 680 sheep, 280 more.

The NLRS said there was another small offering as a result of rain and dwindling supply. The quality and condition of the lambs offered to the usual buyers was fairly mixed.

Demand for well-finished lambs in all weight classes out-weighed supply, resulting in dearer trends for trade and heavy weights. Restockers were active on the plainer condition lambs, but there was a drop in quality. The best of the heavy weight lambs sold up to $20 dearer. There was not a lot of difference in the market for the small number of sheep offered.

Forbes lambs sell to $223

At the Forbes saleyards on Tuesday, the agents yarded 19,050 lambs, 5430 more than last week, and 4450 sheep, 2642 more.

The NLRS said lamb quality was similar to previous sales, with good numbers of well-finished lambs. More plainer store Merino lambs were offered and most returned to the paddock. The usual buyers competed in a fairly steady market.

Light lambs held firm at $115-$126. Trade weights were also fairly steady at $128-$166. Heavy and extra heavyweights sold firm to $3 better, though more weight was offered than last week. Heavy lambs sold from $160-$178. Extra heavyweights made $170-$223. Carcase prices averaged from 643-681c/kg. Merino lambs sold from $115-$159.

Sheep quality continued to be very mixed, with a good number of heavy ewes and some lighter types. Prices remained strong, with Merino ewes making $77-$165. Crossbred ewes sold from $77-$158. Merino wethers made $76-$141.

Deniliquin’s trade lamb prices lift

At the Deniliquin on Tuesday, the agents yarded 2305 lambs, 3363 fewer than two weeks ago, and 912 sheep, 1513 less.

The NLRS said it was a mostly plain lamb yarding for the usual buyers, plus a major domestic buyer who was absent a fortnight ago. The market matched more recent sales, with some significant price gains for trade weight lambs displaying reasonable carcase finish. Prices for any of the very plain score 1 and 2 small lambs fluctuated, mostly around quality.

The single pen of extra heavy export lambs made $190. Heavy trade weight lambs sold to the best demand at $145-$175, with the best pens making over 650c/kg cwt. Most Merino lambs were in plainer 2 score condition with shorter skins and prices were similar to a fortnight ago.

The limited yarding of sheep had some pens of heavy crossbred ewes that sold strongly from $115-$150. The better presented Merino ewes made $104-$125. On a carcase basis, the best mutton made over 400c/kg.

Bendigo trade lamb prices rise $5-$20

In Victoria at the Bendigo saleyards on Monday, the agents yarded 14,667 lambs, 2043 fewer than last week, and 4043 sheep, 44 less.

The NLRS said buyer competition was much stronger for a smaller and plainer yarding of lambs.

Most sales of domestic slaughter lambs averaged $5-$15 dearer, with some of the plainer conditioned lambs gaining up to $20 as bidding for secondary pens was dragged higher by the intense demand.

Extra heavy export lambs weighing more than 30kg cwt were a few dollars dearer at up to $212. Demand was strongest for lines weighing from about 20kg-28kg cwt which benefitted from both domestic and export bidding, with buyers paying to $189 for lambs destined for a local kill.

There was only a limited supply of extra heavy lambs and sales fluctuated from $178-$212, depending on type, quality and the number in a pen. There were only two sales over $200. The best pens of heavy trade lambs sold from $156-$189 and lighter trades made $125-$145. On a carcase basis, these lambs were estimated at 645-670c/kg, with odd pens over 700c/kg. The strong demand carried through onto the plainer lambs which were significantly dearer than recent sales based on fat cover and carcase quality.

Merino lambs were yarded in reasonable numbers and the best trade weight grain-supplemented lines sold from $133-$168, with most over 600c/kg. Plainer and lighter fat score 2 Merino lambs made $80-$125. The very light lambs under 12kg were very plain and this was reflected in prices, as few were suited to restocking.

Most weights and grades of mutton sheep sold dearer. A stand-out line of extra heavy full wool Merino wethers which had been on grain made $165. Heavy crossbred ewes sold from $109-$135. The best lines of Merino mutton trended above 425c/kg cwt.

Ballarat’s trade and heavy lambs average 650-660c/kg

At the Ballarat saleyards on Tuesday, the agents yarded 15,656 lambs, 2215 more than last week, and 3884 sheep, 391 less.

The NLRS said lamb quality was average, with several pens of heavy lambs offered. The usual buyers operated strongly in a dearer market on the trade weight and lighter lambs, with heavy lambs a few dollars easier. The better covered heavier trade weights sold from $148-$171 at around 665c/kg to be $1-$5 up on last week. Heavy lambs sold to $198.

Feeders and restockers were very active, with feeders paying $110-50-$149 for lambs going onto crop. Lighter lots sold from $60-$75. Light weight 2 score lambs made $85-$112. Light trade 2 and 3 score lambs made $100.50-$132 and averaged around 650c/kg. Trade weight 3 and 4 score lambs sold from $132-$160 and heavier drafts made $148-$171, 600-690c/kg to average around 660c/kg. Heavy 3 and 4 score lambs made $170-$198, averaging around 650c/kg. Heavy Merino lambs sold from $130-$140.50 and medium weights made $95.50-$130, averaging 570-590c/kg. Lighter drafts sold from $75-$98.20.

The sheep included all weights and grades that generally sold $1-$5 and up to $10 dearer on selected lots. Some lighter sheep were a little easier. Light weight 1 and 2 score sheep sold from $50-$90 and averaged around 400c/kg. Medium 2 and 3 score sheep made $70-$105, or 320-420c/kg. Merino mutton averaged around 410c/kg. Heavy 3-5 score crossbred sheep made $85-$128. Heavy Merino wethers made $103-$123 and the medium weights sold from $94-$128, 420c-430c/kg. Rams of all weights sold from $50-$128.

Dublin’s heavy lambs lift $14-$19

At the South Australian Livestock Exchange on Tuesday, the agents yarded 4996 lambs, 5004 fewer than last week, and 2187 sheep, 1387 less.

The NLRS said the mixed quality yarding of crossbred and Merino lambs sold to very strong trade and processor competition.

Trade weight crossbreds were keenly sought by trade and domestic buyers and prices lifted substantially. Heavy and extra heavy weight crossbreds were in short supply, processors bid freely and prices surged past last week’s disappointing results. Merino lambs failed to match the rises of the crossbreds and most achieved only modest gains.

Light weight 3 score crossbred lambs lifted $7 to processors to $115-$126 and averaged 576c/kg cwt. Feeders were very quiet, though one speculated on light weights at $50.

Light trade weight 3 scores were scarce and lifted $13 to $117-$146, averaging 565c/kg. Heavy trade weight 4 scores lifted $12 to $132-$158, averaging 602c/kg. Heavy weights lifted $14-$19 to $154-$210, or 617-646c/kg. Extra heavy weights sold to $212.

Light weight Merino lambs sold to feeders and restockers for $46-$88 and processor rates eased marginally to $90-$128. Trade weight 3 scores lifted $8 to $115-$125, averaging 517c/kg. Heavy weights remained unchanged at $120-$162, or 523-550c/kg. A good selection of hoggets sold to very strong competition. Heavy weight Merinos sold from $120-$140 and crossbreds made $130-$145.

The mixed sheep yarding sold to solid processor competition and restockers paid $110 for ewes. Prices for light weight 2 score ewes eased to processors at $59-$104 and averaged 437c/kg. Heavy weight 3 scores eased $8 to $98-$144, averaging 398c/kg. Heavy weight wethers lifted $3 to $118-$135, averaging 454c/kg. Heavy weight rams sold for $94-$112.

Naracoorte’s best lambs make $190

At the Naracoorte saleyards on Tuesday, the agents yarded 3147 lambs, 1323 fewer than last week, and 1383 sheep, 54 less.

The NLRS said more trade and processor buyers were active, along with a small number of restocker orders. Quality was mixed, with more lambs of better weight and condition, but still a large proportion of lambs showing signs of the winter.

Lightweight lambs sold to the trade from $86-$112, with lightweight trade 2 and 3 score lines making $109-$121. Restockers were active at this weight range, paying $99-$113. Trade weight 3 score lambs sold from $120-$140, with similar Merinos making $90-$106. Heavy 4 score lambs made $136-$167 and extra heavy lambs sold from $177-$190. Hoggets mainly made $88-$125.

Light weight ewes sold from $58-$76. Medium weight ewes made $76-$108, or an average of 400c/kg. Heavy ewes sold from $107-$142. Wethers sold to $98 and rams to $110.

Muchea’s lambs sell up to $3-$5 dearer

In Western Australia at the Muchea saleyards, the agents yarded 6800 lambs, 308 fewer than last week, and 2400 sheep, 4600 less.

The NLRS said the improved quality lamb yarding had more good heavy and trade weight drafts. The lack of lamb supply had a positive effect.

Strong demand for air freight trade and ram lambs lifted prices $2-$3. Increased grazier and live export competition lifted Merino ewe and wether lamb rates $3-$5. Graziers were active on light store crossbred lambs which made $60-$71. Merino wether lambs sold to feeders for $70-$133. Merino ewe lambs sold to restockers for $68-$94 and up to $125 to the trade. In the trade section, air freight types sold from $78-$97, with some $2-$3 dearer. Trade lambs at $98-$117 and heavy prime lambs at $120-$126 remained firm. Light ram lambs sold $2-$3 dearer to graziers at $71-$87. The trade and live exporters paid $82-$107 for the better types.

Hoggets sold $2-$5 dearer, receiving solid competition from the trade to sell from $66-$96. Lines of well-conditioned ewes were offered and prices were $5-$8 dearer, or up to nearly 400c/kg for the much better selection. The best heavy ewes sold from $85-$106. The 2 score processor mutton made $71-$88 and light boners sold from $38-$71 to feeders. The better wethers sold to processors for $90-$112. Rams remained firm, with older types selling to processors for $60-$74 and the better younger types suitable for the live export trade making $95-$98.

Tasmania’s lambs sell $2-$8 cheaper

In northern Tasmania on Tuesday, the NLRS said 1250 lambs were yarded at Powranna and Killafaddy, 250 fewer than last week, and 700 sheep, 100 less.

The NLRS said with one major buyer not operating, lamb prices were $2-$8 cheaper, though restockers were very strong on all well-bred lines.

Exporters paid $64-$107 for light and light trade lambs, and restockers bought light lambs for $75-$105 and light trade types for $99-$109. Trade lambs sold for $112-$131, heavy lines made $125-$146 and extra heavy lambs sold from $130-$156.

The mutton market was strong, with most sheep being bought by Victorian exporters.  Light sheep sold from $50-$81, medium weights from $76-$90 and heavy ewes for $96-$115.

Sources: MLA, NLRS, AuctionsPlus.

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