Underbool lamb producers Chris Brown and Gary Crow were enjoying lamb prices of up to $218 at the Ouyen saleyards last week.

LAMB and mutton prices continued to climb in saleyards this week as scattered rainfall tightened lamb supplies and dry conditions increased sheep yardings.

The Eastern States Trade Lamb Indicator climbed 5 cents above its close of 721c/kg carcase weight (cwt) on Tuesday, which was 9c/kg higher than the previous record set on Friday.

The Light lamb indicator also rose another 5 cents, to 675c/kg, reflecting strong export demand, and the heavy lamb indicator also lifted 3 cents to 725c/kg. Strong restocker lamb demand lifted that indicator 15 cents today to 614c/kg.

Meat & Livestock Australia said saleyard sheep and lamb prices have been resilient in 2018, despite abundant supply and limited restocker activity. In recent weeks, some rainfall in drought-affected areas, combined with a slight tightening of supply has lit a fire under prices, with processors competing fiercely for finished lambs, MLA said.

Winter rainfall scarce in NSW

While parts of central New South Wales received some helpful falls over the last week, more than 99 percent of the state remained in ‘drought watch’ conditions or worse, according to the NSW Department of Primary Industries). Elsewhere, parts of Victoria and South Australia received induce rain in early June from a number of cold fronts; however, meaningful falls have been scarce. South-western WA also received scattered falls inearly June, although the season has been largely disappointing thus far, MLA said.

Sheep yardings up, lamb numbers fall

MLA said the traditional winter shortage has begun to impact lamb numbers, while dry conditions in New South Wales have increased sheep yardings.

For the month of June, eastern states lamb yardings totalled 679,000 head, down 134,000 head, or 17pc, year-on-year, driven by a 21pc decline in NSW. Market reports suggest lamb supply has fallen across most categories, particularly in southern NSW saleyards where lighter weight lambs are often well-supplied at this time of year, MLA said. Along with trade and lighter weight lambs, heavy lamb numbers have fallen, with reports the high cost of feed is limiting producer capacity to finish stock.

MLA said unlike lambs, mutton has remained in reasonable supply. Saleyard throughput fell month-on-month, though not by as much as would usually be expected this time of year. Yardings for the month of June totalled 285,000 head, representing an increase of 54,000 head (24%) on June 2017 numbers.

Lamb slaughter has fallen below 2017 levels

According to National Livestock Reporting Service data, weekly eastern states lamb slaughter has finally begun to fall back in line with 2017 levels, while mutton slaughter remains well up year-on-year.

After five months of increased slaughter, lamb supply is beginning to show signs of tightening (if only slight). June eastern states lamb slaughter totalled 1,420,000 head, which was up 4pc year-on-year, although tracking closer to 2017 levels than previously.

Drought conditions across the eastern states, particularly in NSW, have forced many producers to destock despite booming sheepmeat and wool prices. June Sheep slaughter totalled 290,000 head, up 29pc year-on-year. Slaughter has remained high throughout 2018, with year-to-date total up 21pc year-on-year.

Source: MLA.