Brought to you by AG Concepts

Friday, February 22, 2019

Signs of tightening supply

By Matt Dalgleish  |  Source: MLA, Mecardo

2019-02-22 Lamb 1

2019-02-22 Lamb 2

2019-02-22 Lamb 3

A nice lift in prices across the board for all NLRS reported categories of lamb and sheep along the East coast this week, as saleyard throughput figures suggest supply is on the wane. The Eastern States Trade Lamb Indicator (ESTLI) gaining over 3% to close at 665¢/kg cwt.

Prices lifted between 1-6% on the week, with Restocker Lamb the worst performer of the bunch managing a meagre 5¢ lift to close at 646¢ (Figure 1). In contrast, East coast mutton was the standout jumping 6.4% to finish the week at 415¢/kg cwt.

East coast lamb yarding levels provide a clue to the current price behaviour. Throughput has eased 27% from the week prior to see the 2019 trend dip below the normal range for the first time this season with less than 135,000 reported through the saleyard last week. Indeed, since the start of the year average weekly lamb throughput levels have been running 14% below the five-year trend (Figure 2).

East coast sheep yardings posted a dive of a similar magnitude too, registering a 29% drop week on week. Despite the reduced sheep numbers, weekly levels remain just within the normal range at around 75,000 head as above average weekly NSW sheep throughput stems the broader east coast decline in sheep numbers (Figure 3).

Since the start of 2019, average weekly sheep throughput in NSW has been running 14.5% above the five-year average level. In contrast, Victorian sheep yarding levels have been trending 9% below the five-year average, while South Australian sheep throughput has been 20% softer than the seasonal average.

The week ahead

There is nothing of note in terms of rainfall on the BOM weekly forecast for sheep and lamb rearing regions, but the dwindling supply is probably enough to keep prices sustained as we head toward Autumn.

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. 


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!