By Matt Dalgleish | Source: MLA, NLRS, ACU
Our third state percentile summary focuses on Western Australian sheep and lamb prices. As was the case in our previous two articles on NSW and SA-Victorian percentiles we will be comparing the current situation in WA to the national percentile figures.
Taking a look at where current WA prices sit for sheep and lamb categories in comparison to the “normal” historic range for this time of year it is evident that restocker lamb and mutton in WA prices are currently at substantial discounts to the Eastern States Trade Lamb Indicator (ESTLI) – figure 1. As the green column signifies the historic variation in price for this time of year and accounts for approximately 70% of the price variation we can get an indication as to the level of the current price discount to the ESTLI for each category of lamb and sheep.
WA merino lamb prices are comfortably within the expected band; heavy lambs are just within the bottom of the range, while trade lamb prices are just below the seasonal variation in price. Although it is often the case that the WA market for sheep and lamb broadly sit at a discount to the eastern states it is prudent to keep an eye on the overall value of the discounts to determine if any variation away from the “normal” pattern can be explained by supply factors or other unforeseen circumstances.
Indeed, a recent analysis piece on WA mutton prices identified a price discount that appeared to be at the seasonal extremes returned to more expected levels once a temporary supply glut was able to work its way through the market.
Turning to the current percentile figures as expressed by figures 2 and 3 we can see that all categories of WA lamb and sheep have lower percentile figures when compared to the national figures for the same category. Although the WA mutton percentile at 60.8% is the state’s lowest it is only 16.1 percentile points below the national percentile figure of 76.9 for mutton. Contrast this with the restocker percentile of 68.7% in WA compared to the national percentile of 94%, representing 25.3 percentile points difference. This would indicate that restocker lambs in WA appear to be the most under value in the state when compared to the national figures, followed by mutton and trade lambs. In contrast WA merino lamb appear the least under value.
Recent yarding data from WA indicate lower than average figures for sheep and lamb, with sheep figures approximately 50% lower than the five-year average and lamb numbers 30% lower. As the supply numbers indicate tighter conditions than the current WA price percentile suggest there appears to be some room for restocker lambs, mutton and trade lambs to outperform the other WA categories in the coming few weeks.
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