Prime & Store Sheep Reports

Lamb processors under pressure to show producers the money

Terry Sim, November 29, 2023

JM Ellis auctioneer Jack Hickey fields bids at the Hamilton saleyards today.

LAMB processors are expected to be under increased pressure to offer higher forward prices as recent rain eases producer concerns about Summer feed availability.

And New South Wales producers are being told to hold out for prices of 600c/kg-plus if they can finish lambs as recent rain boosts pasture feed and lambs are held out of markets to gain weight.

Processors are reportedly getting plenty of lambs in direct consignments but the numbers of lambs with the quality and weight are declining.

At the Hamilton saleyards yesterday, producers reported general forward offers of 550c/kg-plus for lambs and one New South Wales works has offered 600c/kg for lambs delivered in January-February.

A New South Wales stock agent said if producers take a contract of 550c/kg for lambs in January-February “you are crazy.”

With the numbers of lambs already sold at lower weights, he believed processors’ reluctance to offer adequate forward prices earlier this season will mean they will not be able to get all the quality lambs they need early next year.

“I think it is going to get away on them.

“I think they (processors) should be offering an absolute bare minimum of 600c/kg, but I don’t think it would do it,” he said.

The agent believed that lamb prices will get closer to 700c/kg in saleyards as competition for quality heavy and trade lambs intensifies later this year.

“I really think it could go to 700c/kg.”

He advised lamb producers to hold out for a forward price of 600c/kg-plus “if you can do a good job on them.”

He said the recent rain had shown everyone that “it can rain” after media reporting about coming El Nino conditions had knocked producer confidence. He said a lot of young lambs had been sold into the Middle East or bag lamb market and in NSW the season had affected lamb numbers.

After agents yarded 55,000 lambs in Hamilton today, Lanyons auctioneer Warren Clark said processors were already lifting forward prices.

“It (the rain) certainly has put pressure on them, well and truly.

“I’ve just spoken to a processors and he said by January, this job will be a $1 (100c/kg) dearer.”

Meat & Livestock Australia’s National Livestock Reporting Service said lamb prices lifted to be $10-$15/head dearer as the sale progressed in Hamilton, and especially for heavier lambs over 26kg cwt. New season lambs sold to $195, with most to the trade making 520-620c/kg cwt. Light 12-16kg new season lambs sold from $45-$115, the 18-22kg lambs made $95-$148 and the 22-26kg lambs sold from $116-$167. Well-presented shorn trade lambs 18-26kg made around 480c/kg cwt and the top lambs sold to $120, the NLRS said.

Processors have already offered 600c/kg and at current rates that is “probably not enough anymore,” Mr Clark said.

Mr Clark said Middle East lamb processors are now competing against store lamb buyers in saleyards.

“In the last three weeks, every single one of my (clients’) lambs has been killed.”

What the producers said at Hamilton

Branxholme lamb producer David Fenton at the Hamilton saleyards today.

Branxholme lamb producer David Fenton said the 25mm of rain he received in the past week will enable him to market all his lambs this year.

“We couldn’t get green feed in (a Summer crop) and we ended up putting ewes and lambs in on our hay paddocks … a lot of people have done it.”

Heywood producer Ewan Price said he would have been forced to sell lambs earlier (from next week) if the rain had not come.

“So it has given that bit of a gap and got the green feed going.”

Mr Price said the current forward prices of 540c/kg for 18-32 lambs at Christmas are not that attractive.

“I’ve heard 600c/kg, they are trying to hold it back, but it will come again, and it will come down to quality, but they will find it hard to get the quality.”

Mr Fenton said he sold 456 three month-old Wairere Romney wether lambs to Herds at Geelong this week that averaged 15.9kg cwt and made $59.40, “which I was stoked with.”

“I locked in 370c/kg three weeks ago, because they were only making $20-$30 in here (at Hamilton).”

He sold another 815 Poll Dorset-Romney cross lambs in Hamilton today that averaged $50.19 and sold from $30-$77.

Southern Grampians Livestock and Real Estate agent Josh Lilley said the recent rain had stabilised lamb markets and given producers more opportunities to retain livestock without the pressure to sell.

Many producers would now hold off selling lambs into the New Year for more money, he said.

“The processors are now under more pressure to get lambs because they are being held back.”

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