Lamb prices off the boil in 2021

The expected shift from the decline of new season lambs to an uptick of older lambs has been realised, as is usually seen at this time of year. However, one significant change has occurred that sets apart this year from others – the reduced supply of trade weight lambs coming onto market. For the year-to-date ending 26 February, trade weight processor lamb yardings were down by 40% to 98,000 head. Meanwhile, heavy weight processor lamb supply has held steady, down 6% to 463,000 head for year-to-date.

Trade weight (18-22kg)

Continued rainfall and an abundance of feed has allowed producers to maximise weight gain more effectively, stalling offerings of lighter lambs to the market this year. Yardings are expected to pick up in the coming weeks, however.

Current market conditions still offer premiums for heavier lambs despite prices declining in the last couple of weeks. For the week ending 26 February, trade lamb prices averaged $181/head, down $20/head from year-ago levels.

Heavy weight (22-30kg)

Furthering the effects of a continuing good season, strong marking rates and solid demand, the supply of heavy lambs is tracking just below to year-ago levels. However, prices for heavy lambs have continued to ease, averaging $216/head for the week ending 26 February, down $29/head on year-ago levels.

The margin between the trade and heavy weight price is still great enough to suggest it’s worth finishing lambs for longer, despite a closing in recent weeks as declines in heavy types outweigh declines in trade types. Reduced feed costs should also incentivise to feed for longer to cater for the export market in order to maximise net profit margins.

© Meat & Livestock Australia Limited, 2021