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A slowdown for lamb prices

19 March 2020

Key points:

  • The majority of eastern states lamb indicators beginning to show an easing trend
  • Light lamb prices continue to find support from restockers
  • A correction in trade and heavy lamb prices are an indication of growing uncertainty

For the first time since the beginning of 2020, eastern states lamb indicators have reported week-on-week declines, however, they continue to track above year-ago levels. Prices have remained elevated across all categories in recent months, largely due to widespread rainfall across key sheep producing regions, albeit with ongoing global uncertainty concerning the economic impact of Covid-19 rising.

Store competition for light lambs has remained robust, with restockers increasingly active in the market on the back of improved feed availability. On Tuesday 17 March, the eastern states light lamb indicator was reported at 966¢/kg carcase weight (cwt), up 30¢ from last week and 338¢ higher year-on-year.

Trade lamb prices remained relatively stable, however prices are back from the recent high, the result of growing concerns as to the impact of Covid-19 on demand in overseas markets. The eastern states trade lamb indicator eased 7¢ week-on-week to 947¢, up 302¢/kg from the same period last year.

More pronounced price declines have occurred in the heavier weight lamb categories this week, with major selling centres reporting weekly declines of up to $20/head for heavy lambs. Despite lamb supplies remaining tight, global uncertainty is the key driver of downwards pressure across sheep and lamb prices. For instance, the US is a key market for heavy lambs and this week, major cities on the east and west coast have gone into shutdown, with many foodservice outlets closed. It is estimated that 60% of total Australian lamb imports are consumed in the foodservice channel in the US.

ESTLI-190320-1.jpg

A comparison of state lamb indicators week-on-week:

New South Wales:

  • Light lambs up 29¢ to 985¢/kg cwt
  • Trade lambs back 53¢ to 948¢/kg cwt
  • Heavy lambs back 48¢ to 940¢/kg cwt

Victoria:

  • Light lambs up 37¢ to 982¢/kg cwt
  • Trade lambs up 18¢ to 959¢/kg cwt
  • Heavy lambs back 12¢ to 926¢/kg cwt

South Australia:

  • Light lambs up 27¢ to 897¢/kg cwt
  • Trade lambs back 29¢ to 899¢/kg cwt
  • Heavy lambs back 34¢ to 884¢/kg cwt

To see region specific indicator prices, view our Comprehensive Indicators Report.

© Meat & Livestock Australia Limited, 2020

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