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Tuesday, November 22, 2016

What will drive new year lamb supply

By Angus Brown  |  Source: ABS

Key points

  • NSW is home to the largest number of ewes, and also produced 56% of east coast merino lambs.
  • The number of lambs marked in 2010-11 was similar to 2014-15, yet lambs slaughter was nearly 5 million head lower.
  • The very wet spring in NSW is likely to result in herd rebuilding, and weaker slaughter over the coming year.

2016-11-22 LAMB FIG 1

2016-11-22 LAMB FIG 2

2016-11-22 LAMB FIG 3

Last week we took a look at the changes in the numbers of Merino and other ewes, along with the trends in lamb markings. The Australian Bureau of Statistics (ABS) breaks the data on Merino and other ewes and lambs down to the catchment level. In an effort to look at how lambs supply might progress from here, we looked at the number of lambs produced in each state.

Figure 1 shows that while the flock has been shrinking slowly on a national scale, the biggest state of NSW has remained firmly at the top of the tree, hosting 39% of Australia’s Ewe flock.  Victoria has the second most ewes with 21%, WA 19% and SA 15%.  For ‘Other’ Ewes, NSW is again in front, but only marginally beats Victoria with 4.9 and 3.7 million head respectively. 

As we would expect with NSW having the most total, and other ewes, they produce the most other lambs.  That is, lambs that are not Merinos (figure 2).  Despite the 2.5 million head fall in ABS reported marking rates of other lambs between 2012 and 2015, lamb slaughter has continued higher, recording a new record in 2015-16.  

This somewhat confirms the theory that the increase in the slaughter, rather than retention of Merino lambs, is one of the main drivers of the increased total lamb slaughter.  Figure 3 shows that most 5.4 million Merino lambs, 38% of the national production, are marked in NSW.  In terms of the east coast merino production, 56% comes from NSW. 

As such NSW holds a large proportion of the ‘swinging’ lambs, the ones which could either be held for breeding or wool production.  What happens in NSW in regards to flock rebuilding has a significant effect on lambs supply. 

In 2010 and 2011 a similar number of lambs were marked as 2014-15, yet lamb slaughter was over 5 million head lower.

What does this mean?

In 2010 and 2011 the wet spring in NSW was followed by a very wet summer, which added to an already strong intention to rebuild the flock.  Recent slaughter numbers suggest lamb supply will be lower this year, but a wet summer in NSW could see a repeat of the 2010 and 2011 flock rebuild, and according price rises.

Along with keeping an eye on spring slaughter levels, those with lambs to sell over the coming months should keep close tabs on the weather in NSW, as a wetter than normal summer could spell significant price rises in the new year.

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