Trade lamb prices springing into fourth consecutive increase

Sheep Central November 23, 2016

This line of 360 July-August drop composite lambs, 18kg cwt and most score 2 and 3, sold for $106 at Winchelsea, Victoria, on AuctionsPlus last week.

SPRING lamb prices are heading for their fourth consecutive annual increase, Meat & Livestock Australia has reported.

MLA’S manager of market information Ben Thomas said provided prices don’t slump in the Australian lamb market over coming weeks, 2016 will mark the fourth consecutive year spring lamb prices were dearer than the previous year.

He said the National Trade Lamb Indicator dropped to a seasonal, and annual, low of 386c/kg cwt in 2013, but the same seasonal dip wasn’t as low in 2014, where it landed at 452c/kg cwt, before the same pattern occurred in 2015 and the bar was raised again, to 469c/kg cwt. Click here for the historical graph of trade lamb prices.

“With only four full weeks of saleyards operating to go for 2016, the lowest the National Trade Lamb Indicator has been this year is 528c/kg cwt – raising the bar yet again.

“What’s most remarkable about the sequence of the past four years is that Australian lamb production has also increased over this time, which normally acts as a suppressant on prices,” he said.

“However, what has been of much greater benefit to the market, has been the general decline in the $A over this period, as well as reduced competition from New Zealand on the trade front, and more consistent annual supplies.

“A similar pattern has in fact occurred in the past – specifically for the years 2009-2011.”

Mr Thomas said the primary driver during this time was Australian sheep meat production being the lowest it had been in decades, as the flock recovered from an extended period of drought liquidation.

“Headwinds came to the market in 2012 and 2013, though, when the $A averaged above parity with the US, combined with a recovery in sheep meat availability.

For the period before that (2001 through to 2008) the National Trade Lamb Indicator largely traded between 300-400c/kg cwt, with the greatest limitation to higher prices being international competition, particularly from New Zealand, he said.

Mr Thomas said further analysis on what to expect for the years ahead will be examined in the upcoming 2017 MLA Sheep Industry Projections, due to be released on December 6.

Source: MLA.


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