Prices shrivel from dry weather

24 Aug, 2006 07:00 PM
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THE dry season has caused a slump in lamb and sheep prices throughout Australia, with large numbers of poor-quality stock flooding the market.

Meat and Livestock Australia (MLA) reported national sheep and lamb saleyard indicators dropped between 12-27c/kg carcase weight last week.

MLA market analyst Peter Weeks said the slumps were due to sheep and lambs coming through the market in poorer conditions than what they should be, which was lowering prices.

Mr Weeks said how low the prices dropped and how long for depended on the weather.

"If it continues as dry as it is for another few weeks, I think we're potentially going to see prices come back a bit further, but as soon as we get a whiff of rain, I'd say those lamb prices will go up again," he said.

"I would have expected a peak in those prices in late August to early September, and I still think we'll get that if rain falls.

"But if rain does not fall, we may even get some more price falls in the coming weeks."

Mr Weeks said in the past week and particularly in WA in the past month, the stock coming on to the market were of poor quality and would not usually be sold at this time of year in a good season.

He said the dry conditions were resulting in increasing numbers of stock of a decreasing quality being sent to slaughter.

Mr Weeks said a lack of processors in the market and the availability of forward contracts also were taking the pressure off saleyard prices.

Lamb supplies are usually down during winter and as a result some processors stop for maintenance.

But Mr Weeks said the lack of heavy export lambs available had added to the lack of processor competition in the saleyards.

He said the weather conditions had pushed lighter lambs on to the market with the heavier types remaining scarce.

Mr Weeks said heavier lambs would become available later in the season.

He said a weak US market also had resulted in the lower prices; while the Japanese demand had remained strong, the US market had remained "pretty flat" in recent months for lamb.

Mr Weeks said this had been a consideration for processors in the temporary closures.

He said reports revealed quality sheep and lamb supplies were not available, and the supplies would be tight through winter, which was expected to improve prices.

"It hasn't happened and I think it hasn't happened because there has been a lot of additional slaughter caused by these dry conditions," Mr Weeks said.

Meanwhile, Midland last week saw its largest yarding since the one-day sale format was introduced.

Mr Weeks said the increase was due to producers selling off stock because it was too costly to carry them over.

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