Slaughter lamb prices surge as saleyard offerings dip

Sheep Central February 15, 2017

LAMB prices surged in major saleyards his week, underpinned by falling yardings in some big New South Wales and Victorian centres.

Strong supermarket and exporter demand has helped the National Livestock Reporting Service’s eastern states daily indicators for trade and heavy lamb indicators record consecutive increases on Monday and Tuesday this week.

After Tuesday’s saleyard sales the trade lamb indicator was 21 cents higher for the week at 636c/kg and the heavy lamb indice had jumped 30 cents to 653c/kg over the two days. The ESDI for mutton also climbed over the two days, up 17 cents to 429c/kg.

Agents variously attribute the current rates to strong domestic and export demand for the remaining seasonal supplies, which have been diminished by consistently strong exporter demand for “bag” or light 12-18kg lambs and a lack of light lambs on the market earlier in the season. The higher early season prices for light lambs has also meant fewer were bought by restockers for resale in saleyards and a sharper drop-off in current offerings.

Dubbo agents yarded 14,830 lambs on Monday, 9020 fewer than last week, with processors paying up to $8 more for light weight lambs at $74-$116. Trade lambs lifted up to $13 dearer with 18-23kg 3 scores selling from $110-$175 to average 672c/kg cwt. Heavy weight lambs were $10-$16-plus dearer, with over 22kg 4 score old lambs making $145-$217 and averaging 681c/kg.

Dubbo agent Angus Barlow from Barlow and Eadon Schute Bell said the saleyard has had some big January yardings, but the appearance of Coles and Woolworths buyers at the market showed supplies were short.

“They are not regulars.

“I don’t think the lambs are there and with the rapid decline in the quality of the feed the ones that are there are not doing as well; they are not ready for market yet.”

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Strong early lamb turn-off starting to bite

At Bendigo on Monday, agents yarded 10,046 lambs, 11,135 fewer than last week, and prices for most domestic and export slaughter lambs lifted by $8-$16. The NLRS said bidding reached a top of $212.60 for heavy export lambs; one of about seven pens weighing over 30kg cwt that sold for more than $200.

Elders Bendigo livestock manager Nigel Starick said the saleyards numbers were down due to processors buying so many light lambs earlier in the season, or making the lambs too dear for restockers.

“At the price they (the exporters) were paying for them (12-18kg lambs) at the time it was hard to see a profit in them.

“All processors are doing the bag lamb in some shape or form and so are all buying those lambs that traditionally have been bought by restockers,” he said.

“Central Victoria definitely hasn’t put out the lambs they normally do.

“We might have a couple of decent runs left in us at Bendigo, but we are going to come back pretty quickly on our numbers,” Mr Starick said.

“Prices are at ridiculously high because there are no numbers.”

Ballarat numbers expected to hold

Ballarat agents yarded 14,830 lambs on Tuesday, 3583 fewer than last week, and lighter trade weight lamb prices sold $8-$10 dearer, with heavier trade weights and heavy lambs selling from $8-$15 higher. The NLRS said the best of the extra heavy lambs made to $244, with more than 30 pens selling above $200. Heavier trade weight lambs sold from $154-$181, or mainly 680-690c/kg cwt, but sometimes above 700c/kg. Heavy 3 and 4 score lambs made $170-$208 to also average around 680c/kg and extra heavy export lambs sold from $206-$244.

TB White and Sons agent Xavier Bourke said lambs numbers started to fall away about three weeks ago, but he expected they would hold at the current level for the next 6-8 weeks. Exporters were pushing prices at Ballarat, he said.

“The exporters are driving it at the moment and the trades are going with them.”

Mr Bourke said the season had been too good earlier for many light lambs to be offered.

“You would find 70-80 percent of people had lambs good enough to sell as suckers at $115-$120-plus.

“The numbers of lambs didn’t go out there ate the start of the year because the season and the demand was too good.”

Despite earlier fears of discounts for extra heavy lambs, Mr Bourke said the heaviest lambs were still making the most money in saleyards.

National lamb slaughter lifted to 23 million in 2016

According to the latest data released by the Australian Bureau of Statistics, Australian lamb slaughter in December lifted 9pc year-on-year, with just over 2 million lambs processed.

Meat & Livestock Australia said 3pc increase in the average lamb carcase weight (to 22.8kg) also helped lift national lamb production 13pc over the same period, to 45962 tonnes – underpinned by improved seasonal conditions in key producing regions.

This brought the 2016 total for national lamb slaughter marginally higher than the previous year – with close to 23 million lambs slaughtered.

MLS said total lamb production for 2016 finished just under 516,000 tonnes – a 1pc higher rise year-on-year. In 2016, compared to the year prior, lamb production in:

Victoria increased 1pc to 225,313 tonnes

NSW increased 3pc to 123,162 tonnes

SA declined 5pc to 85,634 tonnes

WA increased production to 65,717 tonnes

Tasmania decreased 16pc to 12,661 tonnes

MLA said favourable spring conditions across key producing areas in 2016 led to many producers retaining stock to utilise feed availability, with greater offerings of heavier lambs in the physical market eventuating throughout December. Lighter, store types therefore trended particularly dearer, underpinned by tighter numbers.

Mutton slaughter declined

National mutton production and slaughter in December declined 24pc and 28pc year-on-year, to 14,242 tonnes and 557,444 respectively. In 2016, mutton production and slaughter decreased 16pc and 18pc year-on-year, with just over 169,800 tonnes cwt produced and 6.9 million head processed, respectively.

MLA said looking forward, as highlighted in MLA’s 2017 Australian sheep industry projections, lamb production and slaughter are forecast to trend back towards 493,000 tonnes cwt and 22 million head, respectively – underpinned by slightly poorer marking rates and fewer ewes joined in the latter half of 2016.  Expectations are for the market to remain buoyant in 2017 as a result of tighter supplies, MLA said.

Sources: MLA, Elders, Barlow and Eadon Schute Bell, and TB White and Sons.


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