Poor demand sends market into meltdown

Sheep sales have been hit by a triple whammy of coronavirus lockdowns, export slump and abbatoir maintenance.

Winter blues: Problems with demand are taking a toll on mid-winter sheep prices. Picture: Andy Rogers

THE lamb market is in the midst of a winter price meltdown as demand issues take effect.

Price falls of $20 to $30 hit all the major saleyards in the past week, and there was little joy to be found earlier this week with rates continuing to weaken.

But farmers continue to show confidence in sheep, paying up to $476 for joined crossbred ewes on the AuctionsPlus network, with the sale being claimed as a new record.

Lamb supply has not been the issue associated with plummeting prices, with saleyard numbers generally tightening at most centres and kill figures tracking well below year ago levels.

Poor demand is the key problem affecting the market, with some of the main exporters not attending all their regular markets and orders from domestic buyers at lower than usual levels.

Part of the slowdown is due to winter maintenance at abattoirs and scheduled shutdowns.

But buyers are reporting that companies are having difficulty selling lamb on the domestic and export markets.

They argue COVID-19 lockdowns stopped the usual sale paths of higher priced lamb cuts into restaurants and food service, and the product is struggling.

Early this week it was revealed two new abattoirs in Victoria recorded a case of coronavirus, with all workers now being tested.

One of the plants was named as JBS in Altona, which is a key processing plant for livestock in Victoria. This could lead to further disruptions.

On Monday night the national heavy lamb price indicator fell to 732c/kg carcass weight after it shed more than 80c/kg in the past week.

A correction of 80 cents on a 30kg lamb is equivalent to a cut of $24.

The tradeweight price indicator has slipped to 771c/kg and is still under pressure.

At Bendigo earlier this week, the sale reached a top of $228 for a pen of extra heavy lambs estimated around 38kg cwt.

But sales over $200 have now become limited, and the National Livestock Reporting Service said it took a very good lamb weighing 28kg and above to step into this price range.

Bendigo company Ellis Nuttall & Co led its run with new season suckers, selling a line of Dorset Dohne-cross for $215.

Auctioneer Rupert Fawcett Jnr said they were a genuine March drop and off dryland Lucerne from the East Loddon area.

They were estimated to weigh between 32-34kg cwt, highlighting how much weight and condition suckers are likely to have after the good season.

Saleyards in NSW are now starting to yard suckers, with between 500 to 2000 seen at Forbes, Griffiths and Wagga Wagga last week.

Young lambs are also being hit by the price corrections.

The mutton market has also plummeted and is struggling to find a base amid erratic demand and results.

Most heavy lambs slipped below $200, with the bulk of sheep from $130 to $180 earlier this week at an estimated 500c-550c/kg.