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Tuesday, May 15, 2018

Record slaughter weights in NSW despite the dry.

By Angus Brown  |  Source: ABS, Mecardo

Key points

  • East coast lamb slaughter weights were higher in the first quarter, while WA was lower.
  • Dry conditions and more grain feeding might have driven higher slaughter weights in NSW, and the opposite in WA.
  • The supply of heavy lambs out of NSW might be lower this winter, as many have been slaughtered already.

2017-03-10 Grain Fig 1

2018-5-15 Sheep Fig 2

It’s an interesting paradox that during a very dry summer Australian, and in particular New South Wales, lamb producers have managed to produce lambs of record weights. The data to March shows rising lamb slaughter weights, adding further impetus to the increasing demand story.

Lamb slaughter was running hot during the first quarter of this year, and it should be no surprise that lamb meat production was also up. However, there were some interesting anomalies in the data, which we can try to explain.

There have been vastly different results in lamb slaughter weights on the east and west coast. East coast lamb meat production was up 5.2%, more than the 3.9% rise in lamb slaughter. The result was a lift in lamb slaughter weights, with the average for January to March up from 23.1 to 23.4kgs. 

The rise on the east coast looks small, and this is due to relatively steady slaughter weights in the largest slaughter state, Victoria. Figure 1 shows a dramatic jump in NSW however, where record weights were recorded in March. 

NSW lamb carcase weights hit 25kgs in May last year, but in March it surpassed this, hitting 25.3kgs.  For the first quarter of 2018 NSW slaughter weights were up 5% on last year and 6% on the five year average. 

We have a couple of theories on the higher slaughter weights in the driest state. The dry season and strong prices might have encouraged more grain feeding of lambs this year. Grainfed lambs will generally put weight on more quickly and could result in higher slaughter weights. This is especially the case in a falling market, when lambs might be held waiting for improving prices, resulting in heavier slaughter weights.

Over in WA, lamb slaughter weights have taken a bit of a dive. Figure 2 shows WA cascase weights down 1.2kgs to record the lowest first quarter weights since 2009, at 20.7kgs. WA had a relatively wet summer, and perhaps we saw the opposite effect of NSW. More grassfed lambs coming in at lower weights, but obviously a lower cost of production.

What does this mean?

On a national scale, lamb meat production was up 4% for the first quarter, compared to 3.6% for slaughter. All this lamb obviously found a home in export markets, which is encouraging from a demand perspective.

With NSW killing more heavier lambs it begs the question of what is left. The lack of grass means lambs that are left will have to be finished on grain, so we might continue to see heavier lambs coming out of NSW, but there might be fewer and this could pressure the market higher. Usually May and June heavy lambs are relatively abundant out of NSW, but they might have been killed already.

Mecardo information is provided to assist in your marketing decisions. It contains a range of data and views on the current market. It is not intended to constitute advice for a specific purpose. Before taking any action in relation to information contained within this report, you should seek advice from a qualified professional. The information is obtained from a variety of sources and neither Mecardo nor Ag Concepts Advisory will be held liable for any loss or damage whatsoever that may arise from the use of information or for any error or mis-statement contained in this report. 


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