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Thursday, July 02, 2015

Tassie lambs on par, cattle behind the east

By Augusto Semmelroth  |  Source: MLA's NLRS

Tasmanian lamb markets trended up in a very similar fashion to the east coast, with trade lamb prices reaching a 10-month high last week. In percentile terms, heavier lamb lines have reached their 97-99th levels while light lambs remain below the 90th level. On the cattle market front, Tasmanian markets are on their way up but look largely discounted to mainland markets.

Key points:

  • Tasmanian lamb markets have largely tracked sideways over the last three months, despite some sporadic weekly price volatility. 
  • As eastern states lamb and sheep markets have edged higher following recent rainfall events, Tasmanian markets have also regained confidence.
  • Despite mixed results among the different lamb categories at the yards, the Tasmanian trade lamb indicator rallied 37¢ in the last two weeks to a 10-month high of 585¢/kg cwt, or its 99th percentile.
  • Light lambs continue to lag behind heavier lines because supplies are more adequate. Patchy rainfall conditions continue to see numbers turnoff in relatively poor condition, while restocker interest is subdued.
  • Mutton markets have also regained some ground in recent weeks, to reach their 93rd percentile last week.
  • In absolute terms, the Tasmanian mutton indicator continues to track 60¢ below Victorian levels, which is around the long-term discount to mainland prices.
  • Despite the record cattle prices seen in Tasmania at the moment (100th percentile), they remain heavily discounted to the east coast.
  • Taking the saleyard trade steer as an example, current prices are 140¢ and 180¢/kg cwt cheaper than in Victoria and NSW, respectively.
  • OTH prices are slightly better, with yearling steers averaging 480¢/kg cwt compared to 419¢/kg cwt at the yards. That said, this is still well below the 550-580¢/kg cwt range seen on the east coast.
  • As with steers, cows are also considerably discounted to VIC/NSW.
  • Improving seasonal conditions should support firmer cattle and lamb prices going forward. 

Read more about how to interpret percentiles

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