Prices hold up despite high slaughter

The resumption of sales on Tuesday saw light store lambs gain $10 to $15 at Ballarat, with trade lambs $4 to $6 better, while in Naracoorte dearer rates of $6 to $10 were seen.

Nationally only the restocker lamb indicator is down on month ago prices, with the trade lamb indicator hovering around the 625c mark.

Combined sheep and lamb slaughter surged week-on-week to reach 687,772 head in the week ending March 22, marking the largest weekly total on record.

Lamb slaughter reached 506,443, the first time it's surpassed the 500,000 mark, and Victoria also recorded its highest slaughter figure.

Year-to-date figures reveal that combined slaughter has reached 1.4 million head, a 22 per cent increase over 2023 slaughter numbers, putting the industry on track for another record slaughter year as predicted.

Episode 3 market analyst Matt Dalgleish said the strong week was 47 per cent higher than the corresponding week last year but it was unsurprising to see heightened slaughter ahead of Easter processing slowdowns.

"The pricing has softening from January peaks but considering the amount of volumes that have come through, particularly in mid to late February and into March... the price has held up remarkably well," he said.

"As we tighten up through autumn and winter I think we're going to see a return back to those more normal increases to prices through that period.

"With this rain that's come through, it's a good start... if we get reasonable falls as we head back in autumn it's going to allow us to go back to that more normal price cycle with the tightening of supply over winter.

"I don't think we'll see the kinds of peaks we saw when we were in the massive rebuild stage but I think we'll still see trade lambs back to the high 700s, low 800s."

Mr Dalgleish said he expected to see strong export figures continue once March data was released.

"If you have a look more broadly in what's happening in the red meat space in the US, their beef stocks are depleted, about 13pc lower than what they were last year at this time of the year... they're steadily wearing away at their herd and beef stocks and that translates to both increased imports of beef product but also spills into increased appetite for sheepmeat as well," he said.

"We've seen that this year, the US demand for Australian lamb has been very strong... back to what we saw throughout 2020 and 2021 when we had 25 to 30pc stronger demand through the year than the five year trend."

Mr Dalgleish said while New Zealand had increased their flock this year for the first time since 2012, it was only marginal meaning they wouldn't have too much capacity to compete with Australia internationally.

"With all the growth areas that are available and only limited supply available, I think it's going to favour the lamb job more longer term," he said.