Lamb prices skyrocket
LAMB has launched itself into the stratosphere, breaking price records almost daily as the predictions of tight supply come to fruition.
The Eastern States Trade Lamb Indicator skyrocketed to a record 950c/kg carcass weight on Monday – up 100c/kg on last month and 29 per cent, or 216c/kg higher than the same time last year.
The new record is more than 7 per cent higher than last August’s peak of 884c/kg.
The rise has forced retail prices to explode, with lamb hitting $50/kg in supermarkets.
The Eastern States Heavy Lamb Indicator is just 14c/kg away from hitting the magical $10/kg mark, closing at 986c/kg on Monday – up 90c/kg on last month and 229c/kg or 30 per cent higher than the same time last year.
All other indicators are above 800c/kg, with the Merino Lamb Indicator at 859c/kg, up 185c/kg on last year’s rate.
Coles this month released a record forward contract of $10/kg carcass weight for 18–26kg sucker lambs delivered in August – the first time a guaranteed $10 has been offered by a processor for lambs.
Retailers are now passing on the cost to customers, with prices of $50/kg seen for frenched lamb cutlets in Coles Narrogin, Western Australia, while online the same product retails for $48.89/kg.
At Coles and Woolworths this week lamb cutlets were being offered for $39/kg.
Meat and Livestock Australia senior market analyst Adam Cheetham said lamb prices had surpassed last year’s levels and were “testing new ground”.
“Heavy lambs getting to 1000c/kg is astounding,” Mr Cheetham said.
He said it was a “classic case of supply and demand”.
“With low scanning rates and lambing percentages, we expect slaughter to be tight for at least the rest of winter.”
The US and China are driving the increase in demand for lamb, with volumes to the US up 10 per cent for the year to the end of last month and China up 20 per cent.
Rabobank senior animal protein analyst Angus GidleyBaird said the price rise had been “phenomenal”.
“Even though grain prices have been high, the prices for heavy lambs is offsetting the grain price,” he said.
Mr Gidley-Baird said to date there had been strong prices in the US, which afforded processors to keep paying more however the price average for lamb in to the US had started to drop slightly.
“We might have reached the top of where prices will get,” he said.
“I wouldn’t be surprised if the lamb slaughter dips a bit more...when new-season lambs come on (ready for sale) is the next question.”