Lamb market’s rain cheque

21 Sep, 2016 02:00 AM
Agents believe any decline in lamb prices would prompt a switch to weight gain thanks to grain prices and seasonal conditions.
Agents believe any decline in lamb prices would prompt a switch to weight gain thanks to grain prices and seasonal conditions.

WHILE the favourable season is spurring lamb prices and providing more marketing options for producers, livestock agents are concerned rates are reaching unsustainable levels.

The benchmark for the price of Australian lamb, the National Trade Lamb Indicator, rose seven cents this week to 622 cents per kilogram carcase weight, while eastern states slaughter levels increased eight per cent week-on-week to 348,229 head and Western Australia up 6pc to 59,847.

Landmark central NSW livestock sales coordinator John Settree said rain had delayed lamb maturing by up to six weeks, with the spring flush expected to peak as late as November.

“Lambs are currently one month behind (maturing), if we get more rain we could be five to six weeks behind,” Mr Settree said.

“We just need two to three weeks of good weather so crops can dry out, the pasture can grow, and lambs can mature – things are ready to go but everything is just too wet.”

However, he said the rain had provided more marketing options which would result in a higher number of producers growing sucker lambs from a traditionally 20 kilogram targeted domestic lamb weight out to export weights of 30kg.

“There is certainly going to be a good spring now with plenty of feed around, so everyone will be able to add on that 3 to 4kg of carcase weight, which will be worth about $24,” he said.

“It’ll allow producers to have options.”

He said spring store markets may be reduced with producers opting to hold and shear their lambs in order to sell as joined ewes.

“A first cross ewe lamb is worth $140, as 1.5 year-old it is worth $240, with some making $300 – it is an option that will be considered,” he said.

While producers had been keen to sell young lambs to capture buoyed rates, agents said any decline in price would prompt a switch to weight gain thanks to grain prices and seasonal conditions.

With grain prices at ten year lows, Mr Settree said supplement feeding was a luring option as the supply of new-season suckers initiates the spring price decline.

However, he said there would be an “inevitable market correction” with the current prices being paid for lambs and grown ewes.

“What I’m hearing from processors is that they cannot sustain the slaughter rates they’re paying,” he said.

“At the moment they’re being outdone by restockers but there will have to be a correction shortly to have 12 months of sustainability.”

With forecasts of continued rain, Mr Settree said substantial water reserves had seen grass fever kick in.

“There is confidence in the season, confidence in the cattle and sheep markets, and if we get the good weather, we’ll see confidence in the grain market. There is a lot of confidence in agriculture at the moment,” he said.

“I just hope restockers are doing their figures on what they can afford so they see a return.

“We all want to see big prices… but we want that for the next 8-10 years so prices need to be sustainable and not get too extreme.”​

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Annabelle Cleeland

Annabelle Cleeland

is the national sheep and wool writer for Fairfax Agricultural Media


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