Market for MK bag lambs strong
Signs are already evident of how important the light MK processing lamb market – and store demand – could be for the flush of new season lambs this spring.
Signs are already evident of how important the light MK processing lamb market – and store demand – could be for the flush of new season lambs this spring.
An analysis of early sucker lambs sold through major saleyards during August suggests the anticipated trend of more lightweight lambs appearing due to the challenging season could play out across the industry.
In broad strokes, the National Livestock Reporting Service captured data for 81,218 suckers sold last month, with this supply actually up 11 per cent nationally compared to August last year.
Where the data gets interesting is a breakdown of the suckers by weight.
There was less heavy sucker lambs sold weighing above 26kg cwt this August compared to 2023, with the supply of these heavier types back by 27pc in Victoria and 23pc in NSW, while in SA numbers have been significantly delayed by the disastrous autumn and winter that region endured.
However, the number of light sucker lambs (sized between 12-20kg cwt) increased in the major production states, more than doubling in Victoria and up 37pc in NSW (see table this page for full details).
While the data is just from four weeks of selling it is an indication of how the lamb market could be shaped by the season and lamb turn-off weight and condition in the run-up to Christmas.
It is already influencing price trends, with the heaviest suckers among the price leaders at 850c to 900c/kg cwt at recent sales, reaching a top of $280 at Bendigo on Monday. Feedback also suggests the limited supply of heavier lambs has helped improve skin prices, with buyers advising rates of $3 to $5 being achieved in the past week as the major skin-buying companies pushed harder for a share of the most high-quality pelts that come off early suckers (less sun and seed damage) which offer a decent size spread.
In the light lambs prices have been supported by store competition and robust demand for MK (Muslim Kill) or ‘bag lambs’, referring to light processing stock from about 12-20kg cwt which are exported in carcass form to the Middle East.
The average price point for young store lambs to the paddock is much healthier levels to 12 months ago when the industry crashed in on itself due to concerns of an El Nino developing.
This highlights the average price for lambs sold on AuctionsPlus. Last week, it was $118 for crossbreds and $111 for Merino lambs. This is substantially better than a year ago when crossbred lambs were averaging $62 on-line and Merino lambs just $39.
This has been putting pressure on MK processors, which have been paying dearer rates of $115 to $145 for good lines of light lambs in the past week.
The MK or ‘bag lamb’ industry will be a vital component of the spring lamb market. Export data shows the market has been very consistent this past year, with between 8000 and 9000 tonnes per month selling into the MENA (Middle East and North Africa) regions.
The Weekly Times did look into whether there was a seasonal element to the trade, but there are no major fluctuations from month to month. There is some peak demand periods around religious festivals such as Ramadan.
But the MK market is price sensitive, and buyers did tell the Weekly Times they expect prices to ease as more light lambs become available in the coming weeks – although how much they can pull the market back will depend on rainfall and restocker confidence.
On the issue of price, some market analysts put their anonymous tips into MLA for its latest market update. The price spread ‘prediction’ for trade lamb by the end of the year was a low of 698c/kg through to the strongest forecast of 828c/kg cwt. For heavy lambs it was 709c/kg to 860c/kg, reflecting the concern the industry has of producers being able to turn off lambs with weight.
Going on results in recent months, light lamb prices have been trending under trade market price.
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