Expect the unexpected in mutton prices

Expect the unexpected in mutton prices


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Heavy lambs, crossbred and Merino ewes and wethers have all exploded in value for top prices to exceed $200 a head this past week.

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In an extraordinary turn of events in numerous prime markets over the past week, heavy lambs, crossbred and Merino ewes and wethers have all exploded in value to exceed $200 a head.

But according to experienced industry players, there is nothing on the exports side of their business to justify the sudden surge in mutton prices, other than diminished supply.

In fact, some among the buying gallery at Bendigo on Monday called the excessive demand as a "play for power" or "turf war", whereby one out-of-radius buyer had invaded another's "territory" and the resident was reclaiming his share and defending his patch.

It was a spectacular show of unbridled competition as the "gentlemanly bidding", normally associated with mutton sales in particular, simply disappeared out the door.

This was especially the case at the heavier end of the market, for sheep with carcase weights that exceeded 26 kilograms dressed.

On numerous occasions, these lots saw the combatants lock horns and go head-to-head in bidding duels that lasted $20 to $30 at a time.

Clearly both wanted sheep to process and in this case, heavy carcase bodies were the centre of their attention, due primarily to the raging drought across western NSW where the big numbers are grazed and quality has been severely hampered.

There were also times in this market where heavy mutton made within a hair's breadth of lamb, racking up rates of 680-690 cents a kilogram, whereas the rest of the mutton market was more poised on 500-550c/kg for medium weights and 400-450c/kg for light sheep.

So what does this all mean for the future?

Popular opinion suggests that both sheep and lamb markets have sailed into uncharted waters.

And the waters ahead may be a very turbulent stretch as individual processors make the onerous call of whether to trade on at a substantial loss or put their respective queues in the rack due to the looming and inevitable lack of supply.

This could necessitate a number of processing plants, restricting their operations on a permanent or semi-permanent basis.

It might also mean market demand may fluctuate violently, according to those who are still willing to play the game.

And the consequences of this could see prices fall as often and as sharp on a daily basis as it might be hoped they could rise.

In fact, it was interesting on Monday during the Bendigo lamb market to observe who competed to create the demand for the day.

A lot of the support came from lesser-known lights within the lamb processing sector, rather than the large headline export companies and the two big supermarkets, who might normally dominate, who reportedly have two to four weeks of contracted or agreed supply piles in front of them.

It could be argued closing works is not an aspect of sheep/lamb processing that the industry should be unaccustomed to.

Over recent past years, small stock chains at Cobram, Cootamundra, NSW, Longford, Deniliquin, NSW, and Murray Bridge, SA, have been mothballed but overall eastern states slaughter of lambs and sheep, combined, is up 4.4 per cent year-on-year.

The interesting times are now upon us.

The story Expect the unexpected in mutton prices first appeared on Stock & Land.

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