Cattle prices and lamb prices split throughout autumn

Cattle prices continue to stay strong during autumn, but the lamb market is lagging considerably — why?

A split in livestock values is emerging this autumn as cattle prices trade higher and lamb values are lower than year ago levels.

All national indicators for lamb this week closed below rates of 12 months ago, some down by as much as 53c/kg carcass weight.

That’s in stark contrast to the cattle industry, where indicators were up to 140c/kg carcass weight higher on Monday and all categories are dearer than last year.

NAB senior agribusiness economist Phil Ziebell told The Weekly Times the split was partly due to seasonal conditions and their impact on the market.

Large areas of NSW and southeast Queensland had received good rain, he said, which had kept demand for cattle strong.

On the flip side, tighter seasonal conditions in key lamb supply areas in Victoria had forced bigger numbers onto the market as the industry’s rebuilding phase began to flow on.

Mr Ziebell said while he was “not concerned about the long-term trajectory for the lamb industry”, it was likely the decade of rising prices was over.

“Lamb producers should be able to handle a bit of downside (in prices) as they have been in a good position financially for a long time,” Mr Ziebell said.

“It’s likely the market has peaked, and we are in a lower price phase, but those prices are still probably in the top 20 per cent for the industry.”

Elders Victoria Riverina state livestock manager Matt Tinkler said a high number of lambs contracted direct to works had taken away any urgency from processors to secure numbers from saleyards.

“We are hearing that a lot more lambs are selling over-the-hooks rather than through the saleyards,” Mr Tinkler said.

“We are also seeing the flow on effect of Covid-19 shutdowns earlier this year when abattoirs could not operate at full capacity, and those lambs are now available.

“We are certainly not seeing the spikes in rates (for lambs) that we have seen around this time.”

Mr Tinkler said the opposite was true for the cattle market, where there was still strong demand.

“We are behind the eight ball when it comes to supply of cattle and that’s why prices are holding on so well,” he said.

Lamb markets were erratic on Monday, selling up to $12 cheaper at Corowa but up to $15 dearer in places at Bendigo.