Our lamb prices high despite the dry season

LAMB prices are holding steady, despite tough seasonal conditions. And while prices are higher than at the same time last year, pundits are tipping much more upside to come. Apart from those sheep producers buying in considerable feed, rarely have better on-farm returns been seen for breeders at this stage in autumn.

The Eastern States Trade Lamb Indicator was trading at 645c/kg carcass weight on Monday – slightly lower than where it started the year at 669c/kg, but higher than the 613c/kg it was at the same time last year. Meat and Livestock Australia market analyst Alex McIntosh said the trade lamb indicator had been around the 650c/kg mark for some time, with the stability largely due to the consistency of lamb supply, despite the difficult season.

But, a supply shortage was expected “at some point, it is very difficult to say when”, Mr McIntosh said. Meanwhile, over-the-hooks lamb indicators were trading at around a 20c/kg premium to saleyard prices, however, most categories had eased during the past fortnight.

The current high sheep slaughter rates were likely to cut into lamb supplies in coming months, as well as poor scanning results.

Mr McIntosh said it was likely that MLA would soon review its June flock prediction down from 65.2 million to 65 million, or below. “This year’s autumn break is really highly anticipated. It is a crucial decision time for lots of producers, more than ever, this year,” he said.

Mecardo analyst Matt Dalgleish said lamb and mutton prices were holding up well on historical rates, despite the dry season. His view was sheep were better suited to dealing with droughts, held condition better and were more efficient water users than cattle. He also attributed the strong prices to the growth in global demand for sheepmeat.