DOMESTIC processors are concerned of a severe shortage of lamb supply, as seasonal conditions dampen spring trade numbers which are expected to flood the export market in autumn.
An estimated 13 per cent less lambs have been sold at major eastern states saleyards in the past six weeks, as the promising season has producers pushing to restock and hold numbers through summer.
“We will have a problem getting our trade meat, especially in autumn, because the season is so good,” Westside Meats livestock manager Ray Clarke, Bacchus Marsh, Vic, said.
Wet weather is behind the delayed arrival of spring lambs this season, due to the late maturing of stock and challenges transporting lambs to market.
The spring conditions has led many farmers to switch from trade to export lambs across the country, due to the prospects of grass in the coming months and deflated grain prices.
“With all the rain we have had across the country, we will have a hell of a season feed wise,” Mr Clarke said.
“That’s why lambs are coming in slow and we haven’t seen the flush come forward. The problem with that is a lot of the lambs will get held over (to autumn) and grown out.”
He said there was a growing concern with many producers growing lambs to the export weight range of 22-28kg, who traditionally targeted the domestic market at 16-22kg.
“The farmers’ worst enemy is having feed,” he said.
“They want something to eat it so they’ll hold onto their lambs an extra season and because of this they’ll grow them too big.”
The delayed spring supply is pointing towards a fragmented market, according to Mr Clarke, who said a potential oversupply of heavy lambs could soften prices.
“That is the nature of the beast, the oversupply forces prices down,” he said.
“You’ll find prices for your good trade weight will stay solid and heavier lambs, if we have an oversupply, there will be less money.”
He said the current undersupply of trade lambs gave weight to the theory producers were opting to hold through to autumn and sell lambs at heavier, export weights.
Fairfax market analyst Murray Arnel said if this was the case and the autumn export market dropped below 500c/kg, the returns on a 26kg carcase would be less than $140, which was inclusive of a $10 skin.
Mr Arnel said if forecasts for trade lambs were unlikely to fall below 550c/kg in autumn due to the perceived shortage of supply it was likely a 21kg lamb would return about $124, which also include a $8 lamb skin.
“One of the factors that will underpin the market is what the store guys do,” Mr Clarke said.
“Its supply and demand, if they’re all fighting over it then it’ll get dearer.
“We’re seeing that have a bearing on the price already, but if the fatteners are prepared to pay $115-$125, it will keep a base in the market so it won’t get ridiculously cheap.”
Producers are expected to decide on their marketing decisions in the coming weeks as to whether they will sell lambs unshorn into the spring market, or exploit the feed conditions by pushing their lambs back into the autumn.
Mr Clarke said the repercussions could be an overflow of heavy lambs on the domestic market.
“It could potentially be discounted because they’re too big for the domestic consumer,” he said.
“A leg of lamb can’t average four kilograms, which is what comes off these heavier lambs.
“That’s why we want the lamb 16-22kg, simply because the cuts of meat for the consumer are smaller and they don’t cost as much.”