The recent wet and cooler conditions across major sheep producing regions have dictated timing and quality of lambs to make it to market.
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Last week restocker lamb prices fell 39 cents to land on 703c per kilogram carcase weight (cwt).
Supply followed suit, with young lamb throughput lower than the week prior.
Prices for processor lambs and mutton improved across most states.
National sheep and lamb yardings rose by 34pc or 72,458 to yard a total of 285,729 head across the country -the second highest weekly yarding for 2022.
Meat and Livestock Australia's senior market information analyst Ripley Atkinson said the major sheep states of NSW and Victoria drove the solid increase, with both states rising in numbers by 61pc and 22pc respectively.
"Evidently, a drier week for both of these states despite overwhelming flooding in major sheep regions of the Riverina in southern NSW allowed a solid uptick in supply of stock to the market," Mr Atkinson said.
"WA and SA numbers were firm or slightly softer, with harvest continuing to dictate supply of stock."
Early reports for this week have shown much stronger lamb throughput with more store lambs being pushed onto the market.
Finished lamb prices improved strongly this week, with the Eastern States Trade Lamb Indicator rising by 2.1pc to reach 759c/kg.
Merino lambs also moved upwards, gaining 38c to 608c/kg cwt.
The Eastern States Heavy Lamb Indicator also improved rising by 3.7pc or 29c week-on-week to hit 818c/kg cwt.
The heavy lamb indicator is currently 49c below the same time last year.
Mr Atkinson said currently, the Eastern States Heavy Lamb Indicator is operating at a 7.8pc or 59c/kg cwt premium to its trade lamb counterpart.
"With the Eastern States Heavy Lamb Indicator at such a premium to the trade lamb, this demonstrates processor buyers demand for heavier stock," he said.
"Although the overall sheep and lamb prices are softer than year-ago levels, it must be put into perspective that prices during this time were near record highs and the market has since fallen to longer term average price performance."
Meanwhile, the mutton market in Victoria lost 15c over the week to finish at 479c/kg while NSW prices lifted 42c to end up at 466c/kg.
Lamb slaughter saw over 350k lambs processed - 5pc more for the same week last year and close to seasonal average levels.
An increase in sheep slaughter saw a 6pc lift compared to the week prior.
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Meanwhile, a report from MLA revealed sheep production has increased, lifting 19pc on the previous quarter.
According to the report, national slaughter and carcase weights improved significantly, lifting production figures.
MLA market analyst Jenny Lim said Victoria saw significant increases in sheep slaughter and production despite wet weather events in the state.
"Vic increased slaughter by 43pc on last quarter, an improvement of 24pc year-on-year," Ms Lim said.
"Production in the state strengthened by 53pc showing the increased availability of mutton on the market.
"Throughput through the indicator has been increasing since July with prices softening.
"Grid prices for sheep have also been coming back as processors prioritise lamb production."
She said although national lamb slaughter increased 2pc there was a 1pc softening in production due to the slight decrease in carcase weights on last quarter.
"This is coming off the back of high weights earlier in the year, although average national carcase weights remain still 6pc higher year-on-year," Ms Lim said.
"Lamb production in South Australia eased 12pc, with a 50pc improvement in goat production in the state.
"A movement to the processing of other small stock has taken up kill floor space for lamb production in the SA."
The largest lamb producing state, Victoria, remained firm quarter-on-quarter with both carcase weights and production improving by 1pc.
