Prime & Store Sheep Reports

TFI releases new forward lamb contracts up to 880c/kg

Terry Sim, June 17, 2021

Robotic cutting of lambs is being installed at TFI’s Tamworth plant.

MAJOR export processor Thomas Foods international has finalised new late Winter/Spring forward lamb contracts and kill space availability as it plans plant maintenance and upgrades at its Tamworth and Lobethal facilities.

TFI’s national smallstock manager Paul Leonard said the success of TFI’s forward lamb contracts three months ago has enabled it to fill its available kill space for its two operating lamb plants for the remainder of June and most of July, especially at Tamworth.

At that time, TFI’s July price for 16-34kg lambs was 850c/kg for crossbred lambs and 830c/kg for Merinos, with the June price 10c/kg less. The current grid at Tamworth is 760c/kg for crossbred lambs and 740c/kg for Merinos.

“We effectively got a very big position in June and July and some of those contract lambs have been rolled into the second week of August,” Mr Leonard said.

TFI’s Lobethal plant in South Australia will have a three week maintenance-annual leave shutdown, with its last kill on Thursday 1 July and restarting on Monday 26 July, but its next available lamb booking date is 1 August. The decision for a longer break is related to a need to do additional maintenance and lamb supply expectations during the period, Mr Leonard said.

DEXA and robotic lamb cutting plan at Tamworth

To allow the installation of its DEXA plant and robotic cutting system, and annual maintenance, TFI’s Tamworth plant will close for about 10 days from 29 July and restart on 9 August, but the plant’s next available kill date for lamb is 16 August. There will still be some limited availability for mutton consignments, Mr Leonard said.

Radio Frequency Identification (RFID) tag hook tracking has already been installed at Tamworth, but the DEXA and robotic cutting installation will continue over the next six months. When this is completed, TFI will also explore value-based payment at Tamworth, Mr Leonard said.

Tamworth forward contract 820c/kg for crossbred lambs

At Tamworth, the new forward contract for predominantly older lambs 16-34kgs from mid-August (16 August) to the end of September will 820c/kg for crossbred lambs and 800c/kg for Merinos.

“That should mop up a few more of those older Western Division, central and New England NSW lambs, which gives them some surety and a premium on the spot price now.”

Lobethal forward price 880c/kg for crossbred lambs

The 16-34kg forward contract for Lobethal, will be for new season lambs delivered from the first week of August and all of September, Mr Leonard said.

For the first two weeks of August, the forward price will be 880c/kg for crossbreds and 860c/kg for Merinos, dropping to 860/840c/kg for the next two weeks, to 840/820c/kg for the next two week (the first two weeks in September), to 820/800c/kg for the next two weeks and to 800/780c/kg for the last week of September.

“We’ve targeted our new season’s lambs to be processed at Lobethal, including lambs for the orders for our domestic and North American are being processed there.”

Mr Leonard said new season’s lambs will still be killed at Tamworth during this period, albeit at the standard price of 820/800c/kg, but TFI is expecting to drag sucker lambs from Forbes south and into the Riverina, and early lambs from north-west and south-east South Australia for processing at Lobethal.

“The incentive is there for lambs to come back to Lobethal rather than to Tamworth, especially for early lambs in August.”

The spot price for old lambs at Lobethal during August-September will be a grid price released on a weekly basis.

Click here to read the TFI Lobethal forward lamb contract.

Click here to read the TFI Tamworth forward lamb contract.


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