Lamb prices resilient, but still room to move

As producers rushed to cash in on a rising market before the Easter and Anzac Day break stopped sales and slowed down processors, prices showed resilience.

The ESTLI now sits 147c/kg above the same time last year, having jumped more than 70c/kg in the past four weeks.

Over the hooks prices also rose this week, with Victoria trade weight lambs averaging 690c/kg, while South Australia and NSW averaged 680c/kg, rising 13c/kg to 40c/kg.

All signs pointed towards a dip in lamb supply by this point of the year, as a consequence of the ongoing drought impacting lambs on the ground, however that hasn't been the case.

Lambs taking longer to get to sale weights because of a lack of feed, and an increase in Merino wethers on the market that would usually be live exported, could have both impacted lamb supply.

Meat and Livestock Australia said for the year to April 5, eastern states lamb slaughter averaged 360,000 head a week, an increase of 2 per cent year-on-year.

But national lamb yardings were actually down more than 400,000 head year-on-year for the first quarter.

This likely impacted the ESTLI averaging 31c/kg higher for the first quarter of 2019 than for the same three months in 2018 - the highest average on record for that period.

Increased export orders are increasing demand.

MLA's market information team said historical data showed prices would be dictated by supply - or a lack thereof - in the coming months.

"A look back at 2018 demonstrates just how responsive prices can become when supply levels change," MLA said.

"For the month of May 2018, eastern states lamb slaughter averaged in excess of 400,000 head per week, while the ESTLI averaged 604c/kg carcase weight.

"By August, slaughter had fallen 31pc to average 280,000 head per week, as deteriorating seasonal conditions hampered the supply of finished lambs."

Alex Collins, McKean McGregor, Bendigo, said the trade lamb had strengthened in the past fortnight, and there had also been a spike in the heavy end.

"We've seen heavy lambs come forward that haven't been protected by forward contracts and producers have decided to come forward after holding," he said.

"But on Monday at Bendigo extra heavy lambs were making 600-640c/kg in cases and that is still 120c/kg shy of some of the [recent] forward contract money."