National trade lamb indicator surpasses 600¢
02 July 2015
The national trade lamb indicator hit 600¢/kg cwt at the end of last week, and has continued to move even higher over the last few days, reaching 604¢/kg cwt on Wednesday (National Livestock Reporting Service). The last time the indicator reached these levels was in April 2014, when it peaked at 600¢ for a day, and before that, not since 2011.
Back in 2011, when the national trade lamb indicator remained above 600¢/kg cwt for almost twelve consecutive weeks (1 February – 20 April), the majority of the country had received several months of above average rainfall and eastern states lamb slaughter averaged just over 260,000 head per week (NLRS). Favourable growing conditions boosted producer sentiment, and demand from all sectors was strong. Processors faced tough competition from producers who were confident to rebuild flocks after seven years of drought drove the national sheep flock to a low of 68.1 million head in 2010.
Now looking at June 2015, and while lamb prices have started to move back into 2011 territory, the context is somewhat different. Firstly, rainfall has been ‘average’ to ‘below average’ across the majority of sheep producing regions for most of the year (Bureau of Meteorology). Furthermore, NLRS eastern states lamb slaughter has averaged over 340,000 head per week during June (excluding the Queen’s birthday short trading week).
NSW and Victorian saleyards have been leading the way for trade lamb (18-22kg cwt) prices in June, both averaging 592¢/kg cwt for the month, after the weekly average in each state reached highs of 610¢/kg cwt last week. Tasmanian trade lamb saleyard prices averaged 568¢/kg cwt in June, followed by SA, at 541¢/kg cwt. Trade lambs through WA saleyards averaged 496¢/kg during the month.
Considering lamb prices have reached these levels with large numbers on the market, and supplies are anticipated to tighten over the coming months, there is further upward potential for lamb prices going forward – particularly if seasonal conditions improve. However, BOM’s most recent update (23 June) suggests that while the El Niño continues to strengthen, it is not possible at this stage to determine how strong the impact on rainfall will be. Global demand is expected to stay strong and the $A is predicted to remain below 80US¢, which will also continue to support the market.
The national mutton indicator hit 400¢ earlier in June, and in the past week has moved even higher, for the first time since 2011. Eastern states sheep slaughter, as reported by NLRS, averaged just over 72,000 head per week in June, and while this is 39% lower than year-ago levels, it is still 50% higher than the June average in 2011.
Victorian saleyards attracted the highest mutton (18-24kg cwt) prices during June, averaging 394¢/kg cwt, followed by NSW (386¢/kg cwt) and SA (369¢/kg cwt). Sheep through Tasmanian saleyards averaged 356¢/kg cwt, while WA sheep saleyard prices averaged 275¢/kg cwt during the month.
Join myMLA today
One username and password for key integrity and information Systems (LPA/NVD, NLIS, MSA & LDL).
A personalised online dashboard that provides news, weather, events and R&D tools relevant to you.
Customised market information and analysis.
Already registered for myMLA?