Light vs heavy lamb price gap

The price difference between light and heavy lambs is as big as during the spring price slump last year, with farmers looking for forward price options for early weaned lambs.

The price difference between light and heavy lambs is something that should be on the radar of producers amid patchy seasonal conditions that are likely to distort the spring market.

Limited paddock feed, particularly in southern grazing areas, will inevitably lead to more lighter weight and plain conditioned suckers amid the double whammy of reduced restocker interest.

The price gap between weight grades is already unusually wide and is a factor in determining if feeding lambs is a viable option.

The graph on this page shows the national saleyard price trend for heavy lambs compared to light lambs and it illustrates a wide difference of 165c/kg carcass weight. Heavy lambs are currently tracking at an average of 809c/kg compared to light lambs at 645c/kg, according to data from Meat and Livestock Australia.

The gap is as big as it was during the spring price slump last year, and among the widest it has been in the past five years. Although it needs to be noted that at this time of the year the light lamb price can be dragged down by the clean-up of secondary old-season lambs lacking weight and condition.

Growing apart: Light lamb prices versus heavy lambs

But even the new-season sucker prices are showing signs of pressure. AuctionsPlus reported an increased volume of 20,387 new-season lambs listed on the platform last week, with the average price easing down to $110 a head compared to $127 the week before.

There was a big line of more than 1000 very young Dorper sucker lambs sold at Bendigo on Monday and these made from $48 to $84 to restockers with the tops sold at $126 to MK processors. A major line of young Merino lambs peaked at $150 to processors, with the majority to restockers at $78 to $128.

Rain in the next few weeks will ultimately shape the spring lamb selling market after an underwhelming rainfall event across most of Victoria last weekend put farmers more on edge about the season.

A wide price gap of more than 100c/kg between light and store lambs compared to heavier slaughter lambs puts the option of feeding on the table, particularly if processors are willing to guarantee a price going forward.

This week processors acknowledged to The Weekly Times that farmers are looking for forward price options for early weaned lambs that will require further feeding – but nothing is on the table yet.

The danger point for processors wanting good quality lambs appears to be the November and December period which is when the turn-off cycle of suckers switches to the Western District and focuses on Hamilton with bi-weekly sales of up to 50,000 head.

Unless there is a significant turnaround in feed conditions in the southwest buyers won’t get the big runs of good trade and heavy lambs out of this area. It means unless processors commit to some forward pricing they could face a similar outcome to what is happening now in the form of decent price premiums for weight and finish.

A breakdown of the latest saleyard data by size shows how the lamb market is currently performing around weight:

30kg-plus EXPORT lambs trending at 794c/kg carcass weight;

26-30kg HEAVY lambs at 816c/kg;

24-26kg SUPERMARKET style lambs at 820c/kg;

22-24kg TRADE lambs at 803c/kg;

20-22kg TRADE lambs at 774c/kg;

18-20kg LIGHT lambs at 704c/kg;

16-18kg LIGHT lambs at 652c/kg; and

12-16kg LIGHT lambs at 552c/kg.

The figures show the sharp drop in price once lambs are under 20kg.

The other market segment to watch in terms of price difference between weight is the mutton market, with very light ewes struggling for processor support at a number of sales in the past week.