THE WA sheep industry was taken by surprise last week when saleyard prices dropped dramatically due to what has been put down to a lack of competition in the market.
At the Katanning Regional Sheep Saleyards Wednesday last week lamb prices dropped $60 a head, which some farmers labelled a "big crash".
Prices also declined last week at Muchea due to what agents say is "limited processor support".
Meat and Livestock Australia's (MLA) report from Katanning last week showed that numbers reduced by almost 12,000 sheep for a total yarding of 9067 head.
The report said there was no recovery from the previous week, with "prices easing again on all categories".
"The best heavy lambs sold to $155, or 592c/kg carcase weight (cwt), while store lambs eased from $8 to $22/head, with limited demand.
"Mutton prices eased on all categories, with the best mutton selling for $135/head."
MLA said young ewes sold from $70 up to $110 for the heaviest ewes, to average $92, a decline of $35/head.
"Medium weight ewes weighing 18-23kg eased to sell from $80 to $122/head, carrying a three inch fleece.
"Older wethers sold from $100 to $130/head to processors."
Elders Muchea reported that lamb, mutton and shippers all dropped in value on August 13.
Lamb prices were reduced by 100c/kg to 690c/kg, bringing the price below 710c/kg at the same time last year, while mutton dropped 120c/kg from 600c/kg to 480c/kg - almost equal with the same time last year.
Shipping wethers, while still well above what was being offered for them by live exporters earlier in the year, also saw a drop of $25 per head to range from $130-$150 per head.
The WA industry has warned government that limited processor capacity in WA combined with limited domestic buyers and a ban on live exports, would impact the market.
In recent months Eastern States buyers have been in the WA market to sure up supplies - but due to a lack of supply some of those Eastern States processors have had to reduce the number of shifts or close down in the short-term.
Corrigin sheep producer Steven Bolt was at the Katanning Saleyards last week and said the drop in price was a shock but it highlighted the need for competition in the market.
He said the drop was not a price correction, as could be evidenced by the prices reached in the Eastern States.
"It shows that live export is an important part of our market here and that there is a need for a buyer to take sheep that are not suitable for the local processing sector," Mr Bolt said.
Mr Bolt said without competition in general it highlighted how volatile the market can be with excess stock available due to seasonal conditions, without strong processor, live export or grazier demand.
WAMMCO chief executive Coll McRury said the Katanning plant had "just come off four day weeks" and did its first full week last week.
He said when he heard about the prices last week he had to question his livestock manager about it, as it came as a surprise.
"We only operate out of the saleyards when we have to," Mr McRury said.
"As a co-operative we have direct suppliers and we do a higher proportion of lamb than mutton."
He said contrary to media reports WAMMCO was "not killing a heap of mutton and we are not full up with ewes".
Mr McRury said other processors may be experiencing a backlog but he wasn't sure.
WA processors Fletchers International Exports and V&V Walsh were unavailable for comment.