By Matt Dalgleish | Source: MLA, Mecardo
The Eastern States Trade Lamb Indicator (ESTLI) managed to climb 3.8% this week and East coast mutton wasn’t far behind, registering a 3.6% gain, as lighter throughput compared to this time last season lent some support to prices.
East coast Restocker lamb was one of the few categories to register a price drop, easing 2.3% as heatwave conditions sapped the buying enthusiasm out of restockers to see it close the week at 649¢/kg cwt. Merino lamb was the only other NLRS reported category along the East coast to suffer a price fall, albeit marginal at 5¢, to end the week at 620¢ (Figure 1).
Late last year we mentioned the prospect of a supply gap surfacing early into the new year and going by the price behaviour of heavy lamb this week, the star performer gaining 4.3% to 673¢, we could see the beginnings of a supply squeeze for heavy lamb.
Early throughput data for NSW Heavy lambs shows saleyard volumes for the first few weeks of January are trekking 40% below the 2018 pattern and 25% below the five-year average level (Figure 2). It would be interesting to see if this is being replicated across other states and probably worthy of a look in one of our sheep market analysis pieces for next week – keep your eyes peeled for that one.
Lower than average volumes also seemed to help give the ESTLI a leg up this week with a 26¢ boost to close at 677¢/kg cwt. East coast lamb throughput levels are running 28% lower than for the same period in 2018 and 17% under the five-year seasonal average since the start of 2019 (Figure 3).
There is some very light rain forecast for southern parts of the country next week, but not enough to really get a rocket up lamb and sheep prices. A more likely scenario will see prices respond to supply volumes, with continued weak supplies helping to support gradual price gains.
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