The lamb supply shortage has failed to feed the unquenchable appetite of the country’s processors and producers, propelling recent prices by up to 18 per cent year-on-year.
The well documented surge in this season’s prices has trade lamb carcases average 628c/kg for the opening two months of 2017, while export lamb values have risen by a similar margin to av 634c/kg.
A Fairfax Media analysis of lamb trading has revealed throughput at major NSW, Victoria and South Australia selling centres has increase by 2.5pc year-on- year for the September to February selling season, however national slaughter level has declined by 5.5pc, or about 20000 less lambs processed per week during this period.
The increased prices of the slaughter market has also had a domino effect on restocker activity, with less than half the numbers normally secured to return to the paddock being purchased this summer.
“Prior to Christmas there was very little restocker activity,” Kerr and Co, Hamilton auctioneer Craig Pertzel said.
“The vast majority of the lambs that were born with weights in the price range of $95-$110 per head were being killed.
“Now that type of light lamb has risen more than $25/head and restockers are outbidding the meat companies for them.
“Everyone has suddenly recognised there are not many lambs out there so we expect it to get quite dear in the winter time.”
Hamilton’s lamb sale last week was evidence of this was light weight store lambs jumped up to $30/head week-on-week as prices exceed 1000c/kg carcase weight (cwt) at times.
“There were mixed messages from the industry saying that there would be plenty of lambs around after Christmas but that hasn’t been the case at all,” Mr Pertzel said.
“Export abattoirs were hoping light lambs could be purchased for about 460c/kg, and they’re making up to 700c/kg now.
“Lamb numbers in our area will be nowhere near where they have been in the past going into autumn and winter.”
Examination of the National Livestock Reporting Service data has shown less than 10pc of lambs sold in Eastern Australia since September were purchased for restocking. This number is half the volume procured last year in the same period at 19.1pc.
In the Riverina and North East Victoria, competition by processors on light lambs has diminished supply of carrier-over lambs going forward, according to Corcoran Parker agent Clynton Rixon, Corowa, NSW.
“If producers want to purchase lambs they need to be in front of the light (lamb) processors because they’ve been the backbone in the (restocker) market,” Mr Rixon said.
In terms of supply going forward, he believed mutton would remain stable with low numbers through the system, while lamb supply would diminish further.
While the supply situation could point to further market gains, Mr Rixon warned restockers to be wary in the current price territory.
“If lambs stick around the 600-650c/kg people will make money out of the current prices for store lambs,” he said.
“The top end of the store lamb market is very strong and at a level you would want to be a little cautious.”
Annabelle Cleeland
Annabelle Cleeland is Fairfax Media’s national sheep and wool writer. Annabelle joined the Fairfax team in 2012 to nurture her love of Australian agriculture. She began as the Victorian western district reporter at Stock & Land before taking on a senior position as a journalist reporting on all industries statewide. Annabelle’s appetite to report on issues which affect the sheep and wool industry has seen her travel to many parts of Australia and abroad. She is excited to spin industry yarns during a period of substantial demand for the sheepmeat and wool industries. Annabelle enjoys horse riding and climbing mountains, and is a lazy supporter of the Geelong Football Club.
Annabelle Cleeland is Fairfax Media’s national sheep and wool writer. Annabelle joined the Fairfax team in 2012 to nurture her love of Australian agriculture. She began as the Victorian western district reporter at Stock & Land before taking on a senior position as a journalist reporting on all industries statewide. Annabelle’s appetite to report on issues which affect the sheep and wool industry has seen her travel to many parts of Australia and abroad. She is excited to spin industry yarns during a period of substantial demand for the sheepmeat and wool industries. Annabelle enjoys horse riding and climbing mountains, and is a lazy supporter of the Geelong Football Club.
