Lamb prices bounce back

After hitting record highs at the end of winter and then steadily declining during September, lamb prices have seen somewhat of a resurgence over the past few weeks.

Widespread rain sparked keener interest from producers looking to restock and increased demand was evident across most categories. The national restocker lamb indicator (0–18kg cwt) was 737¢ on Monday (22 October), an increase of 57¢/kg cwt week-on-week. Nationally, trade lambs (18.1–22kg cwt) lifted 50¢ to average 754¢, while heavy lambs rose 65¢ to 769¢/kg cwt on Monday.

Restocker lamb indicators

The heavy reliance of the restocker market on seasonal conditions often results in more pronounced fluctuations that are not as prominent in the more feeder and processor-centric markets of the trade and heavy weight lambs.

This week, restocker lambs in SA were trading at a premium to the other states, helped by closer to average weather conditions for SA compared to NSW and much of Victoria.

Throughout October to date, the restocker lamb indicator in Victoria has fallen away compared to SA and NSW, as the rain that fell across much of the eastern seaboard didn’t extend far south. SA (771¢), NSW (760¢), and Victoria (722¢) were all trading well above WA (536¢/kg cwt) for restocker lambs last week.

Trade lamb

Through the first half of the year, trade lamb indicators in all states were generally within 50¢ of each other. Since the end of June however, price variations between states have become more pronounced.

At the start of September trade weight lambs in NSW were trading at a 70¢ premium to Victoria and a further 158¢/kg cwt ahead of SA prices. While a degree of normality has returned for the eastern states, trade weight lambs in WA are tracking considerably lower than their eastern states counterparts – 186¢/kg below Victorian trade lambs last week. This has been on the back of elevated lamb slaughter in WA in September, up 39% year-on year highlighted last week (Market watch: WA).

Supply

Over last three weeks, saleyard throughput has returned to a more normal level in terms of livestock weight distribution. The eastern states have experienced some fluctuation recently with an above average supply of heavy lambs in June and July followed by an influx of light lambs through August and September. The relatively even spread of weights in saleyards last week is in line with year-on-year levels.