Brought to you by AG Concepts

Friday, February 24, 2017

The lamb yo-yo continues

By Angus Brown  |  Source: MLA

2017-1-24 Lamb Fig 1

2017-1-24 Lamb Fig 2

2017-1-24 Lamb Fig 3

Lamb price goes up, more lambs come to the market, lamb price goes down. It’s a pretty simple equation but the trend remains up. For now. All sheep and lamb indicators felt the impact of stronger supply, except Merino lambs.

Just when we thought lamb supply was surely starting to wane, this week saw east coast yardings jump to their second highest level for the year.  Figure 1 shows east coast lamb yardings, which were 55% stronger than the same time week last year. 

Lamb slaughter remains weak, with yardings reportedly getting higher numbers of light and store lambs, which are hitting the market due to record prices. 

The impact of the 30% weekly jump in yardings was a relatively gentle fall in price.  The Eastern States Trade Lamb Indicator (ESTLI) eased 24¢ this week on the back of stronger yardings.  Figure 2 shows some basic trendlines for the ESTLI, with the current price sitting right on the very steep upward trend from the end of December, but still above the January upward trend.

Merino lambs avoided the fall this week, as they haven’t quite had the same rally as trade lambs.  Interestingly Merino lambs in Victoria and NSW are just above 600¢, while in South Australia, Merino lambs fell 25¢ to 535¢/kg cwt.  It was worth making the trip to SA to buy Merino lambs this week.

In WA lamb prices defied the larger yardings, rising 18¢ to 576¢/kg cwt.  The WATLI is showing an impressive upward trend, and has hit a 2.5 year high (figure 3).

The week ahead

The good thing about rising prices in WA is that is shows that export demand seems to be strong.  Supply is tight on the east coast, but not that much tighter than last year that you expect prices to be 100¢ higher.  This also suggests that lamb demand is robust.  Given the price of the main competing red meat, beef, it’s should come as no surprise that lamb prices have risen relative to last year.     

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. 

x

Sign up for a FREE BASIC SUBSCRIPTION now to read this article.

Mecardo will send you its latest market analysis outlook delivered to your Inbox as it's published.  You will also receive one month Premium access for free.

You tell us what information you want to hear about, so you'll only be alerted to information that is relevant to you.

Learn more about Mecardo Sign Up Now!