Export Lamb

JBS releases lamb contracts as winter supply concerns grow

Terry Sim, February 10, 2016

JBS-logoEXPECTATIONS of an earlier tightening of lamb supplies leading into winter have coincided with the release of forward contracts up to August by export processor JBS Australia and other contracts for March delivery.

Landmark national livestock manager Mark Barton believed lamb supplies will be tight from March to August, with more opportunities for producers to lock in forward prices for lambs on feed as processors try to secure supplies in coming months.

He believed the traditional tightening of lamb supplies that normally occurred in May-June would start earlier this year, possibly in March.

“We’ve had some blokes who have had a little bit of summer rain, which has helped put them in a position to take lambs through over these next 8-10 weeks.

“I think it is a pretty good investment, it makes sense to try to do that.”

Other Victorian agents have also reported fewer 2015-drop lambs going out onto pastures or on feed and fewer drafts retained for shearing.

TB White and Sons livestock manager at Ballarat Xavier Bourke said the company bought possibly 30 per cent fewer restocking lambs across Victoria for their clients this season, due to the lack of spring pasture. The company’s breeder clients have retained fewer lambs for shearing because of poor summer crop growth, he said.

“Our numbers are definitely down on what we buy, though our throughput through the yards is probably higher than ever.”

Slow late-2015 slaughter figures have escalated

Although the number of lambs processed across Australia was lower later last year than in 2015 – down 4-7 percent from October to December — in January 2016 the average weekly eastern states lamb slaughter lifted 10 percent year-on-year to 356,423. In October 2015, the average weekly ES kill was 387,000, down 4pc year-on-year, falling to 372,000 in November (down 5pc) and to about 360,000 in December (down 7pc).

MLA market information manager Ben Thomas said the January lift in the average weekly eastern states lamb kill has been largely attributed to the dry December period, although Victoria’s January rainfall was at or above average.

“That’s a fairly significant increase for this time of the year.”

He said MLA, based on its December sheep and lamb survey, was expecting the lamb numbers processed for 2016 to be slightly lower than in 2015 at a bit below 22 million head.

He expected “at this stage” that there will be tighter availability in the winter months – as more lambs have been processed earlier than expected.

JBS offering contracts up to August

JBS Australia southern livestock manager Steve Chapman said the company is offering 500-530c/kg for 18.1-30kg crossbred lambs in February, March and April and 540-570c/kg for May to mid-August, depending on the time of delivery to Brooklyn, Cobram and Bordertown. The company also has February, March and April lamb prices out from 500-530c/kg for crossbreds. Discounts of 30c/kg apply for Merinos.

The forward contract also indicates the company intends to shut its Bordertown plant down for maintenance for two weeks in July and the Cobram plant for the first two weeks of August.

Coles contract for March lambs

Coles has released its March contract for minimum lots of 150 shorn 18-25kg lambs of 560c/kg for delivery to Gundagai and Brooklyn, with the usual 50pc upside clause to the Coles weekly spot grid price.

Both JBS Australia and Coles will only purchase lambs from vendors using current National Vendor Declaration forms.

See JBS Australia’s latest forward lamb contract here.


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