Insight: What’s behind the erratic prices for sheep and lamb

Producers sending lambs to market have no idea if their stock will get premiums or be punished in a fickle lamb market. Here’s how a Northern Grampians farmer made the call to sell.

Wild price variations of up to $40 a week are creating havoc in sheep and lamb markets across eastern Australia.

In what has been likened to a game of do-si-do, the big price fluctuations on a week-to-week basis are either encouraging producers to sell or discouraging them from offering their lambs and sheep.

Ironically, when prices fall at one market, the next markets have smaller yardings and prices rise again.

Meat and Livestock Australia figures show 28,810 lambs were yarded at Bendigo, Corowa and Dubbo on Monday, a 37 per cent drop on the week before where prices were cheaper.

Agents in action at the Bendigo prime sheep sale on Monday. Picture: Zoe Phillips

Mick Crapper, from Mick Crapper Agencies at Raywood, said it was difficult for producers to plan when prices varied so greatly.

“If you are selling lambs at the moment, you don’t know what you are going to get with prices varying by $30 or $40 from sale to sale,” Mr Crapper said.

“That is a 20 per cent variation in rates weekly – if there was a 10 per cent drop in the share market, it would be all over the news yet producers are just meant to accept it.”

Mr Crapper said Covid labour issues in abattoirs were brought up as a reason, but “the abattoirs keep buying when the prices fall”.

“It would make sense if the falling lamb prices meant cheaper meat but it never seems to go that way,” he said.

Livestock Consulting Victoria principal Ashleigh Vincent said the shortage of numbers one week pushed prices up, and then more producers were encouraged to sell the following week.

“I feel like the best strategy for our clients has been to sell now, despite the price corrections, given what is happening with the season,” Mr Vincent said.

“Everyone I’ve spoken to feels like the spring supply of lambs is running late, and while the lambs we have been selling have been lighter than normal due to rain and no sunshine, we want to get some of them sold before the flush of numbers comes in.

“The feeling is that a lot of lambs are going to come in October and while the market will find a new level, it is likely it will be lower than it has been in the past few years.”

HOW GREG BALDWIN MADE THE CALL TO SELL

The fickle nature of this year’s sheep and lamb market has encouraged one producer to adopt a “bet each way” strategy to his selling program.

Greg Baldwin from Gre Gre, in the Northern Grampians, runs a flock of Charinga-blood Merinos and sold some of his wethers at Bendigo on Monday.

The wethers, with a couple of months wool and rising four tooth, made $149, which was not as much as he had hoped.

But given the challenges the sheep industry is facing, Mr Baldwin said he had no regrets on his decision to sell some early.

Greg Baldwin from Gre Gre selling 336 and agent Mick Crapper at the Bendigo prime sale on Monday. Picture: Zoe Phillips

“We have to make room for lambs, and we could have held on longer and got $10 more, or the market could have collapsed and we could have got less,” he said.

“I don’t like to think I am a negative person but it does concern me there are a few issues for the industry like problems in the abattoirs and the financial crisis.”

Mr Baldwin said while he had hoped for a better price, the $149 was “certainly not the end of the world”.

“I think we have just got used to prices being high and we probably expect too much,” he said.

“Prices could get stronger through spring or they might tail right off which I hope they won’t, but by selling some this week, we’ve had a bet each way.”