By Angus Brown | Source: MLA
There are still plenty of lambs coming for slaughter in Victoria, but NSW supply is waning. As such, lamb prices have been on the wane early in the year, and mutton has also been dragged lower. It seems the destocking of sheep isn’t over yet.
In recent years the first few weeks of January have been marked by a lamb slaughter peak as lamb is stockpiled for Australia Day. This year we are headed the same way on an east coast level, but Victoria has jumped to an early peak (Figure 1).
It appears there are still plenty of finished lambs flowing to Victorian processors, and this means bids at saleyards haven’t had to lift to fill kills. The Eastern States Trade Lamb Indicator (ESTLI) this week dipped to its lowest level since June. At 651¢/kg cwt, the ESTLI is still better than this time last year, but a long way off the contracts offered for January back in the spring.
Sheep supply has also been strong early in the year. This has made our prediction of mutton being the star performer of early 2019 look a bit ambitious. East coast sheep slaughter started the year well below the end of 2018, but at a higher level than any seen in the first half of 2018.
Mutton prices have tanked in response, Figure 3 shows Mutton hitting 374¢/kg cwt, a three month low. Figure 3 also shows mutton can be very volatile and is just as likely to bounce back if supply tightens.
There is little rain on the forecast, and as such prices will be relying on weakening finished lamb supplies to see any price rallies. The same goes for mutton, and it’s hard to see sheep continuing to flow at current lower price levels. We have seen lamb prices rally during dry times, but not this early in the year.
Want to see more ?
Go to Sheep data
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.
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!