Lamb supply and prices down

Lamb supply and prices down

Sheepmeat
East coast lamb slaughter is tracking 8.4 per cent below this time last year and 10pc below the five year average.

East coast lamb slaughter is tracking 8.4 per cent below this time last year and 10pc below the five year average.

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The Stock Take: Mecardo's Angus Brown analyses the lamb market.

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Drought induced flock liquidation afflicting NSW and parts of South Australia is starting to show up in lamb supply.

Victoria has had the closest to a normal season and managed to maintain more of its flock.

As such, the normal heavy supplies out of the south are coming as per usual.

East coast lamb slaughter is tracking 8.4 per cent below this time last year and 10pc below the five year average.

Despite relatively steady lamb slaughter for the past six weeks, lamb prices have been on the decline.

Lower lamb supplies were expected in NSW this year, and we are starting to see the impact of the lower flock in the north.

NSW lamb slaughter has rarely been lower than this year's levels and year to date, slaughter is only 1pc below 2018 (Figure 3).

FIGURE 3: NSW lamb slaughter. NSW slaughter has been running around 12.5pc below November last year.

FIGURE 3: NSW lamb slaughter. NSW slaughter has been running around 12.5pc below November last year.

It seems more NSW lambs came early as a result of being fed, and now, and for the rest of the year, the tighter supply will be felt.

By contrast, lamb slaughter in Victoria has spent spring at similar levels to last year.

The supply dearth in Victoria came in the winter, and it was more about a lack of old season supply and few lambs coming south from NSW.

Victoria's year to date slaughter is 5pc behind last year, but it's hard to imagine it moving higher than last year.

What does it mean?

The flush of lambs out of Victoria should continue up until the end of the year and this will continue to prop up east coast supplies.

There is plenty of conjecture as to what will happen in the new year.

It is unlikely that NSW slaughter will lift to the levels of last year, which should support prices.

If Victorian supplies remain strong, we might have cheaper lambs in the south for a while to come.

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