Confidence mounts as prices continue to roll in

Good prices for lambs keep in rolling in

Sheep
BUYERS: Bruce and Geanie Rogers, Curbin, NSW, with Tim Wiggins, Christie and Hood, paid an average $342 for first-cross ewes at Dunedoo, NSW.

BUYERS: Bruce and Geanie Rogers, Curbin, NSW, with Tim Wiggins, Christie and Hood, paid an average $342 for first-cross ewes at Dunedoo, NSW.

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Good prices for lambs keep in rolling in, but supply, especially for trade lambs, remains sparse.

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With good feed, hearty crop results and efficient rainfalls, the current supply, demand and price model in Australia's sheep industry means the risk remains low for those producers wanting to hold on to lambs.

And the good prices just keep rolling in, with the Eastern States Trade Lamb Indicator ending the week on 849 ents per kilogram, five per cent above this time last year.

According to southern region livestock manager of Nutrien Ag Solutions Adam Mountjoy, the good prices are forecast to remain for the upcoming autumn and winter, fuelling huge incentive to producers to breed more lambs for next year.

"Five per cent doesn't seem like a huge number, but when we are talking a base of 800c/kg it's getting up there," Mr Mountjoy said.

"For the last week of January, to have the ESTLI at 849c, and now we have forward pricing options in front of us at up to 820c/kg for domestic lambs right through till the end of March, it offers a huge amount of security to producers.

"It really insulates our guys that are out in the field and feeding lambs and supplementary feeding. It puts them in a very bright position."

He said the current lift in the wool market highlights the real value in breeding sheep with the mutton market tracking above 600c/kg.

"We saw an opportunity last week, throughout some of the sale mediums that are out there, that we can go back in and buy a very sound young Merino ewe for somewhere between $270 and $320," he said.

"Those ewes that are scanned up in lamb are now going to cut a more valuable fleece than what it looked like a month ago. They represent extraordinary value now the mutton market sees itself back over 600c."

He said there is good money to be made from trade lambs, but finding them is now the challenge with producers preferring to be adding weight to a lamb at $8/kg rather than $4/kg carcase weight.

"The guys within the network are certainly spreading their wings far and wide to procure lambs," he said.

"We haven't been buoyed by really heavyweight returns from our autumn and winter markets, but I think now the crunch has come and we are certainly witnessing a forecasted shortage.

"Now we are seeing some of the larger operators stepping in and backgrounding lambs and buying feedlot lambs at are already killable weights.

"So if they are buying them now at killable weights and putting them out to make them heavier that is a pretty good indication to us and the entire industry that the markets are going to continue in a bullish fashion going forward into autumn and winter."

The story Confidence mounts as prices continue to roll in first appeared on Farm Online.

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