Sheepmeat market's sideways trajectory

According to Rural Bank's March insights, prices are expected to continue sideways for the next few weeks as the high supply continues but relief is likely later in the season as supply tightens after the high turn-off of light lambs in the second half of 2023.

According to the report year-to-date average lamb slaughter is almost 80 thousand head per week ahead of this time last year.

With domestic retail prices for lamb starting to increase in response to the price rebound early in the year, it is expected that domestic lamb consumption, which had been on the rise, may slow down.

Reports from the National Livestock Reporting Service indicate a substantial offering of light lambs on the market, with prices remaining stable, although Victoria has seen a premium, with prices as of Tuesday running 72c above the national indicator, at 608c compared to 536c.

Elders Bendigo livestock manager Nigel Starick said forward pricing for lambs in April, May and June was "not extreme prices, just moderate prices".

"There is some take up on that going forward so that's going to let the market play out a little on where the base level is going to be," he said.

Mr Starick said a lot of light lambs were taken up by abattoirs in November and December.

"I think people that now want to chase a few lambs to put on feed for the winter are finding it tough enough to buy, the price has lifted considerably compared to where it was because there's competition now between the producers, agents and abattoirs all trying to buy light lambs," he said.

Sheep and lamb slaughter decreased slightly going into March, dropping by 1023 to 608,974 head.

Lamb slaughter eased by 19pc to 434,893 head, with Victoria down by 47,849 head while South Australia lifted by 27,312 and NSW slaughter by 11,564.

Sheep slaughter rose by 16,753 to 174,081 head, with NSW up by 38,414 head and Victorian slaughter down by 18,467 head.

With public holidays in Victoria and South Australia and the impending Easter break, Mr Starick said the shortened weeks could be expected to cause some slow downs in processing but pricing should remain stable.

"I think all processors are operating whether they're in the market or over the hooks, but they're all operating heavily... so that might just be where the numbers are at the moment," he said.

"I think right now the lamb job is being driven by quality and you'll find quality lambs are selling to a premium.

"We've been so dry and hot for the last few weeks that we're still looking to some warm weather going forward... that will have a bit of a sell off but also we're leading into cropping time so there's going to be traditional sell off from croppers that have lambs on and can't hold them any longer so that will just be the main one.

"The sheep job is the main one where there are extreme highs and lows, we'd love to see a bit more consistency in that pricing."