Lamb prices plummet, but is the market bottom in sight?

Sheep Central, October 14, 2015

LAMB prices continued to fall in saleyards early this week as yardings increased under pressure from seasonal conditions, pasture and stock water concerns.

Processors have been able to back prices for light trade weight new season lambs to mostly 350-560/kg and to 400-500c/kg for heavier drafts, after recent warmer weather fuelled a sharper seasonal turn-off.

Over-the-hook prices have also been pegged lower this week by processors with more than adequate supplies of lambs and sheep around them.

However, restockers have been more active at the lower prices, paying 350-560c/kg for 12-18kg cwt drafts and over 600c/kg for some lines, but also pushing further into trade weight categories as processor saleyard demand remains selective.

Elders national livestock and wool manager Chris Howie said lamb prices were still good, despite recent price falls.

“We’re starting from a long way up and as I tell everyone, this happens every year.

“We’ve seen the seasonal correction in price come forward 3-4 weeks because of that hot weather that came through two weeks ago.”

Prices might improve in December

He said there was a still a lot of enquiry for lambs, with Merinos making $55-$75, to restockers. Processors can only process a certain number of stock a day, and as a rule this time of the year, the mutton and lamb job comes off, Mr Howie said.

“But I don’t think it will be for very long.

“We may have six or eight weeks where the price pressure is put on and I think into December we will just see it gradually improve again.”

Mr Howie said some producers would start to utilise hay stubbles and some failed crops rather than sell lambs now.

“I actually think that once we get out the back ends of November we are going into a supply-demand situation where we are all going to be looking for lambs to sell.

“At present we are seeing the normal October supply glut.

“In the old days it would have gone from 300 cents to 200 cents, well now it has come back from 550 cents back to 420 cents.”

Mr Howie said the hot weather in early October pushed lambs into Wagga and Bendigo, and out of around Keith in South Australia into the market three weeks earlier, by producers hit by seed concerns and not wanting to shear.

“My numbers (in WA, SA and Victoria) now have backed off over the last five to six days, which tells me that there are people saying ‘we are just going to hand on a bit until this job finds a new level’.

“I would suggest that we’ve got a lot of producers that are saying ‘we’ve got feed, there is no need to panic.”

Mr Howie said surface water was an issue in areas of south-west Victoria. Stock water and pasture supplies were also tight around Mt Gambier.

Restocker confidence on lambs and sheep was still strong, he said.

“The hole that we have seen appear is on those secondary young ewes in the last week.

“Merino wether lambs are hanging on, and first and second cross restocking lambs really haven’t seen much of a check,” he said.

“The best young ewes are making $160-$170, and normally they would come back to $140-$150, but they have come back to $110-$130.

“There is an opportunity if somebody wanted to put some young ewes away,” Mr Howie said.

NLRS indicators for Merino and slaughter lambs come back

After Tuesday’s saleyard sales, the NLRS quoted its Eastern States Daily Indicators for all but restocker lambs as 12-18 cents lower. However, the indicators for trade and heavy lambs remain 14-15 cents above values 12 months ago and the restocker ESDI is up 31 cents on the level a year ago.

The lamb ESDIs are: restocker 513c/kg, no change; Merino 396c/kg, down 17c; light 431c/kg, down 18c; trade 471c/kg, down 14c; heavy 468c/kg, down 12c. The national trade lamb indicator is at 486c/kg, down 16 cents, and the heavy indice closed on 467c/kg, 13 cents lower.

The ESDI for mutton finished 9 cents lower on 278c/kg on Tuesday and the national indice is on 277c/kg, down 9 cents.

OTH lamb and mutton rates still falling

In New South Wales this week, the NLRS this week reported lamb over-the-hook indicators were lower again week-on-week, although no trend will be reported as a regular contributor did not quote this week. NSW’s OTH rates for 2-4 score lambs are: 18-20kg, 440-510c/kg; 20-24kg, 480-510c/kg; 24-26kg+, 460-510c/kg; Merinos 16-22kg, 370-450c/kg.

NSW’s medium and heavy weight mutton categories declined an average of 20c/kg cwt. NSW mutton rates are: 14-18kg, 230-310c/kg, no change; 18-24kg, 250-320c/kg, down 20c; 24kg+, 220-330c/kg, down 19c.

In Victoria, the NLRS said over-the-hook lamb indicators slipped lower again this week, with trade weight categories averaging 508c/kg cwt. Victoria’s OTH rates for 2-4 score lambs are: 16-24kg, 500-520c/kg, down 17-18c; 24-26kg, 470-500c/kg, down 25c; 26kg+, 470c/kg, down 20c.

Victoria’s mutton over-the-hook indicators also declined, particularly the heavy weight category which averaged 220c/kg cwt. No trend will be reported for mutton this week, due to a contributor resuming to quote. The mutton rates this week are: 14-18kg, 230-300c/kg; 18-24kg, 250-30-0c/kg; 24kg+, 200-250c/kg.

In South Australia, the NLRS said over-the-hook lamb indicators fell 20c/kg cwt on average across all categories week-on-week, with trade weight lambs averaging 477c/kg cwt. The OTH rates for 2-4 score lamb are: 16-18kg, 460c/kg, down 20c; 18-24kg, 460-510c/kg, down 20c; 24-26kg+, 460-470c/kg, down 20c; Merinos 16-24kg, 410-430c/kg, down 20c.

SA’s mutton over-the-hook indicators edged lower again, with medium weights averaging 263c/kg cwt. There will be no trend reported for mutton this week, due to a contributor resuming to quote, NLRS said. The mutton rates are: 14-18kg, 220-230c/kg; 18-24kg, 240-300c/kg; 24kg+, 200-280c/kg.

Tasmania’s OTH rates for sheep and lambs are unchanged this week, the NLRS said. The OTH rates for 2-4 score lambs are: 0-16kg, 480-500c/kg; 16-18kgh, 480-520c/kg; 18-26kg, 500-520c/kg. The sheep rates are: 0-14kg, 310-330c/kg; 14-24kg, 320-340c/kg; 24kg+, 320-330c/kg.

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

Dubbo’s new season trade lambs $12-$14 cheaper

In New South Wales at the Dubbo saleyards on Monday, the agents yarded 30,756 lambs, 5516 more than two weeks ago, and 9561 sheep, 1561 more.

The NLRS said lamb quality was fair to good. Some of the new season lambs were dry in the skin and carrying burr. Trade weights and heavy lambs were better supplied, along with a good number of Merinos with cover. Store lambs were in shorter supply. All the usual buyers attended a much softer market.

New season trade weights were $14-$16 cheaper on the unshorn lines. Shorn new season lambs were back around $10. The medium and heavy new season lambs ranged from $95-$122, or 460-500c/kg cwt for the well-conditioned shorn lambs. Heavy new season lambs sold to $125. New season store lambs ranged from $58 for light weights to $112 for heavy lambs.

Old season lambs sold mostly $15-$20 easier over most weights and grades. The trade weights sold from $84-$118. Heavy lambs made $110-$131 and extra heavy weights sold to $151, making 370-410c/kg. Merino trade weights sold from $74-$125 for lambs with full wool.

Sheep quality was good, with most in forward condition. Prices were back $6-$10. Medium weight ewes sold from $56-$95 and heavy weights reached $105. Merino wethers made to $111.20.

Corowa’s new season trade lambs $10-$15 cheaper

At the Corowa saleyards on Monday, the agents yarded 16,800 lambs, 1694 than two weeks ago, and 6000 sheep, 3413 more.

The NLRS said the yarding was mostly well-finished new season lambs, with only a few older lambs. Some lambs were drying off in the wool. Light weight lambs were $10 cheaper, with the 12-18kg cwt 2 scores selling from $69-$92. Trade weight new season lambs sold $10-$15 cheaper at $74-$119. A single pen of new season lambs made $143. Trade and heavy weight old lambs were $10 cheaper, with lambs over 18kg making $93-$134.

It was mostly a good quality yarding of sheep, with the processors operating on the bulk of the yarding. Most sheep were well-finished, including some Merinos in full fleece. The prime conditioned ewes and wethers sold $20-$30 cheaper. Crossbred ewes sold from $57-$80 and Merino wethers made $58.

Tamworth sheep and lambs sell cheaper

At the Tamworth saleyards on Monday, the agents yarded 4000 lambs, 1050 more than two weeks ago.

The NLRS said sheep and lamb numbers were lifted by consignments due to the very hot, dry weather. The quality of the lamb offering was fair to good, with trade weight young lambs well-supplied. The regular orders were in place. Comparing to the sale of a fortnight ago market trends were cheaper throughout. Quality was also a factor, with a lot of lambs drying out.

Young trade and heavy weight lambs sold $10-$14 cheaper. Good quality light weight young lambs attracted restocker activity, with prices holding up reasonably well. Secondary quality old lambs met with limited demand and prices fell significantly. Well-finished trade and heavy weight old lambs sold to a cheaper trend, with heavy weights down by $8-$10. The quality and condition of the sheep on offer was quite mixed. Market trends were cheaper through all classes.

Restocker demand strong at Forbes

At the Forbes saleyards on Tuesday, the agents yarded 16,940 lambs, 9693 fewer than last week, and 9200 sheep, 1507 more.

The NLRS said lamb quality was similar to previous sales, though there more better finished lambs. Store type lambs attracted strong competition from restockers. The usual buyers competed in a fairly steady market.

New season lamb demand from restockers was strong at $76-$109. Light lambs sold from $92-$98. Trade weights held fairly firm at $106-$125. Heavy and extra heavy weight lambs also held fairly steady. Heavy lambs sold from $115-$136 and extra heavy weights made $147. Carcase prices ranged from 468-490c/kg.

Old trade weight lambs sold from $101-$114. Heavy weights made $110-$130 and extra heavy weights to $169.

Most sheep were mixed quality Merinos. Prices were fairly similar to the previous sale. Merino ewes sold from $74-$98. Crossbreds ranged from $70-$87. Dorper ewes made $62-$78. Merino wethers sold from $86-$96.

Inverell restockers competed on light lambs

At the Inverell saleyards on Tuesday, the agents yarded 2377 lambs, 171 more than two weeks ago, and 1301 sheep, 140 more.

The NLRS said the lamb yarding included a few pens of young lambs, a good supply of old trade weights and several pens of heavy lambs. Quality was good, with most off crop or supplementary fed. However, a few pens of light lambs were offered.

The market was firm to $6 dearer, with young lambs making to $136. Heavy old lambs sold to $140. Restockers were active, competing on the light lambs.

The sheep were mainly of trade weight ewes and wethers of mixed quality. Competition was weaker, with most classes of sheep selling cheaper.

Bendigo lamb prices mostly $5-$10 down

In Victoria at the Bendigo saleyards on Monday, the agents yarded 24,364 lambs, 3399 fewer than last week, and 10,343 sheep, 1183 more.

The NLRS said lamb quality remained mixed, reflecting the tough season, with most young lambs showing dryness and in store condition. The regular buyers attended, but not all were active or operated at their usual capacity.

Prices were mostly $5-$10 easier, although some of the heaviest slaughter lambs showed bigger corrections despite limited supplies. Export weight young lambs sold to $129. Demand for heavy young lambs was subdued and there were only about 24 pens across the yarding that sold from $120-$129. Most of the trade weight lambs sold to domestic buyers at $96-$116. In carcase terms, the heaviest young lambs were estimated at 420-430c/kg, with rates improving to 450-470c/kg for the better quality trade lambs. Select pens of nicely presented young lambs around 20kg cwt recorded slight premiums of up to 500c/kg cwt.

Ballarat agents again bought bigger store trade lambs at $107-$120. The general run of lighter weight store lambs sold from $76-$96 and held their value the best to average $3-$6 lower than a week ago. A limited selection of recently shorn young store lambs sold to strong demand at up to $95 as buyers favoured lambs that could go straight into the paddock. The main store orders were from Ballarat, Echuca, Birchip, Yarrawonga, Wycheproof and the local Bendigo area.

The yarding of old season lambs was small and buyers showed the most interest in shorter-skinned trade weight types, with plain long-wool and extra-heavy lambs discounted.

Sheep sold to weaker demand, with most mutton buyers not operating at their usual capacity. Heavy sheep were most affected, with prices averaging another $7-$12 cheaper in crossbreds and Merinos. Lighter and leaner trade sheep sold to the best demand, but also averaged lower than a week ago. Heavy crossbred ewes sold from $48-$67. Merino ewes in a big skin sold to $88 and heavy weathers to $80. Sales over $70 were limited, with most sheep making $45-$65. On a carcase basis, heavy mutton ranged from about 180-220c/kg and better trade sheep from 240-280c/kg.

Ballarat’s trade and heavy lambs sell $5-$10 easier

At the Ballarat saleyards on Tuesday, the agents yarded 21,829 lambs, 7313 more than last week, and 9922 sheep, 834 more.

The NLRS said the usual buyers attended, although not all operated fully. Trade weight and heavy lamb quality was good, but they sold $5-$10 easier. The better domestic lambs made to $126, while the heavy lambs reached $138.

There were large numbers of lighter lambs suitable for both processors and restockers. Restocker lambs sold mostly from $70-$102, and from $36-$70 for lighter lots, to be up to $10 lower.

Limited numbers of old lambs were yarded, with the heavier lots making $79-$100. Light weight 2 score lambs sold from $56-$62. Lighter trade 3 score lambs made $73-$107 and averaged around 450c/kg cwt. Trade weight 3 and 4 score lambs sold from $96-$114, while heavier drafts sold from $111-$126, ranging from 420-480c/kg, to average around 460c/kg. Heavy 3 and 4 score lambs sold from $119-$138.

All weights and grades of sheep were offered. Heavy Merino and crossbred sheep sold $10-$15 cheaper and more in places. Light and medium Merinos eased $2-$5 and the crossbreds were up to $10 cheaper. Light weight 1 and 2 score sheep sold from $30-$65, with very light 1 scores selling from $10-$15. Medium weight 2 and 3 score sheep sold from $44-$78, or 190-310c/kg, with Merinos averaging around 265c/kg. Heavy 3 to 5 score sheep sold from $44-$86, with heavy Merino wethers making $67-$74. Medium weights sold from $46-$76 and averaged around 270c/kg. Restockers also paid from $58-$66 for Merino wethers and from $54-$68 for crossbred ewes.

No supermarket demand at Dublin

At the South Australian Livestock Exchange in Dublin on Tuesday, the agents yarded 15,294 lambs, 4621 more than last week, and 3951 sheep, 439 more.

The NLRDS said the mixed quality crossbred and Merino lambs sold to easing competition from the usual trade and processor buyers, but there was no supermarket demand. All buyers operated, but some at reduced capacity. A large contingent of agents and store buyers took advantage of the falling prices by concentrating on buying heavier weight lambs to shear and feed on.

Feeders paid $67-$90 for light weight 2 score crossbred lambs and $80-$104 for heavy trade weights. Light weight 3 score crossbreds sold to trade buyers eased $11 to $75-$96 to average 416c/kg cwt. Light trade weight 4 scores eased $15 to $94-$110, averaging 433c/kg. Heavy trade weights eased $16 to $97-$115, to average 420c/kg. Heavy weights eased $19 to $110-$130, or 430-435c/kg.

Merino lambs were plentiful and restockers paid $52-$68 for light weights, and up to $82 trade weights. Light weight Merinos sold to processors eased $12 to $70-$81 and the few trade weights yarded eased $7 to $82-$100, or 375-390c/kg.

Few old lambs were yarded. Processors paid $85-$105 for heavy weight crossbreds and $85-$104 for Merinos. Heavy weight Merino hoggets sold from $65-$94 and crossbreds made $70-$90.

The generally good quality sheep sold to further easing demand from the usual processors. Restockers were selectively active on heavy sheep in anticipation of stronger demand in the New Year. Light weight 2 score ewe prices retreated $8 to $37-$60 to average 205c/kg cwt. Heavy weight 3 score ewes eased a further $7 to $50-$65, averaging 191c/kg. Heavy weight ewes sold to restockers for $45-$68. Processors paid $60-$82 for wethers. Heavy weight 3 score wethers sold up to $20 cheaper to processors at $60-$85 to average 241c/kg. Heavy weight rams made $40-$50.

Naracoorte attracts the restockers

At the Naracoorte saleyards on Tuesday, the agents yarded 14,973 lambs, 1342 more than last week, and 1496 sheep, 1126 more.

The NLRS said the usual trade and processor buyers were active, along with a much larger field of restocker buyers. Restockers provided strong competition on the lighter weight section of the offering, mainly consisting of new season lambs. Some excellent weighted lambs were offered, but most were light weights.

Light weight 1 and 2 score lambs sold from $47-$59. Light weight 2 and 3 score lambs ranged from $70-$94, as restockers paid $5-$10 less than last week. Lighter trade weight 2 and 3 score lambs ranged from $93-$110. Trade weight 3 score lamb prices fell by up to9 $10 to $98-$112, or around 440c/kg. Heavy 4 score lambs sold from $102-$125 and extra heavy types made $120-$130 to also be up to $10 cheaper.

Light weight sheep sold from $45-$56, $6 cheaper. Medium weight 2 and 3 scores made $54-$69, or around 260c/kg cwt. Restockers paid $60-$80. All heavier sheep sold $10 cheaper, with heavy ewes making $55-$72. Wethers sold to $62 and rams made to $50.

Hot dry conditions boost Muchea yarding

In Western Australia at the Muchea saleyards on Tuesday, the agents yarded 6729 lambs, 1229 more than last week, and 6500 sheep, 176 more.

The NLRS said the yarding increased with hot and dry conditions across the supply region. Crossbred lambs and ewes again dominated numbers. The lambs were mostly lighter weight drafts showing signs of dryness with moderate supplies of prime trade weight drafts. Ewe weight was also back on last week with large numbers of light conditioned ewes offered. Buyers continued to be more selective which saw solid numbers of lambs and ewes purchased by restockers.

Prices for store lambs improved by close to $6, particularly for the very light drafts. Trade weight drafts sold to a slightly dearer trend. Light store lambs sold to restockers for $36-$82 and the better light lamb drafts sold to processors for $64-$91, both close to $5 dearer. Trade weight drafts sold for $75-$106 to be firm to $3 dearer at 420-470c/kg cwt. Heavy lambs made $98-$111/head to average close to 445c/kg. Prices for the limited numbers of old season lambs and shorn new season lambs remained similar at close to 400c/kg.

Restockers supported mutton prices with solid numbers returning to the paddock. Ewes sold to restockers $4 dearer. Prices to processors were firm to $3 cheaper, largely due to weight. Wethers were purchased by restockers and feeders at improved prices without live export competition. Light weight ewes sold to restockers for $25-$60 and heavier drafts with some skin value sold to $73. The 2 score mutton sold to processors for $37-$57, to be close to firm. Heavier weight drafts made $49-$62.50, or 210-235c/kg, very similar to last week. Wether prices lifted close to $5 on quality, with most drafts going to restockers and feeders. Heavier weight drafts made $80-$102, with the lighter weight drafts making $50-$80. Rams were mostly cheaper, with ram lambs making $65-$89 and suitable young drafts selling to feeders at $30-$68. One line of heavy weight young rams made $90 and old rams sold to processors for $5-$25.

Old lamb prices ease $4-$10 in northern Tasmania

At the northern Tasmanian saleyards on Tuesday, the agents yarded 880 lambs, 270 more than last week, and 520 sheep, 230 fewer.

The NLRS said there were fewer new season lambs and more old season drafts at Powranna and Killafaddy on Tuesday. New season lambs sold to a similar market and most old lamb prices eased $4-$10, with light lambs most affected.

Restockers bought new seasons lambs for $85-$103. Meat buyers paid $100-$122 for trade weights and $120-$133 for heavy lambs. Exporters paid $69-$76 for light old lambs, trade weights made $82-$109 and a few heavy pens sold from $105-$128.

It was a mixed yarding of sheep. All regular exporters attended, but not all operated and prices were generally easier. Heavy ewes attracted limited competition. Light ewes made $58-$61, medium weights sold from $35-$77 and heavy over conditioned ewes ranged $40-$47.

Sources: MLA, NLRS, AuctionsPlus



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