Reduced supply of heavy lambs
12 September 2018
The national heavy lamb indicator recently surpassed 900¢/kg carcase weight (cwt), the first time ever it’s exceeded this mark.
The market has come off the boil to a certain extent over the last few days, with the heavy lamb indicator decreasing by 80c/kg cwt, to sit at 836¢ (11September). However, it remains at historically high levels and 230¢/kg cwt up on last year.
The national record for most expensive lot of lambs was broken last Monday (for the tenth time since 20 July), with 35kg cwt lambs at Dubbo selling for $344/head.
A market breakdown by weight shows that heavy lambs (22–30kg cwt) coming through saleyards nationally is down from 36% of supply eight weeks ago to just 19% of the total offered last week. Restocker lambs (under 18kg cwt) are especially well supplied as it becomes increasingly difficult and costly to finish stock.
The total amount of restocker category lambs offered has increased 11% year-on-year, despite overall lamb yardings being down 18%.
National heavy lamb supply has dropped sharply as producers who had heavy lambs offloaded them as prices started to increase. High grain costs and minimal forage mass across most of the country has made it increasingly difficult to grow stock currently in the light or trade weight ranges to heavier weights. Since the beginning of April, the national heavy lamb indicator has gone up an amazing 225c/kg cwt, a 37% or $67.5/head increase for a 30kg cwt lamb in just four months.
Lamb slaughter declined considerably since the beginning of July, as the supply of finished lambs decreased after a prolonged period of increased slaughter between April and June. This diminished supply has also seen heavy lamb over-the-hooks indicators rise to 800¢ in SA, 830¢ in Victoria and 840¢/kg cwt in NSW.
As highlighted in a recent Prices and Markets article, the current drought conditions have delayed the entry of new season lambs. Many producers are reportedly struggling to achieve the usual weight gains required for new season lambs to be market-ready, to reach the trade or heavy weight ranges.
Despite increases in the last week, 31% fewer new season lambs have been sold through MLA reported saleyards in July and August in 2018 compared to last year.
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