More lambs slaughtered, prices fall

Lamb and sheep numbers are recovering from abattoir disruptions, but prices are softening.

Lamb slaughter increased almost 50 per cent in one week as processors start to come out of Covid-19 disruptions.

While it had an impact on prices, with trade lamb and mutton prices falling, prices are still well above long-term averages.

The latest slaughter figures (for the week to January 14) from Meat and Livestock Australia show lamb slaughter rose 46 per cent, or 100,000 lambs to 319,000 head.

However, it is still 29 per cent below the same time last year.

The eastern states trade lamb indicator was sitting at 837c/kg carcass weight on Monday, down 12c/kg for the week, while heavy lambs was also at 837c/kg, down 10c/kg in a week and the mutton indicator was at 569c/kg, a fall of 64c/kg for the week.

MLA market information analyst Ripley Atkinson said when put in perspective, when numbers jumped, demand remained strong.

“Even with increased supply, prices are still quite favourable,” he said.

“I don’t think people need to be concerned, the market is performing quite well and is favourable for producers.”

Mr Atkinson said in the first week of selling for the year producers held back stock to see where the market would go, then numbers have jumped up since which contributed to the softening of prices.

Thomas Elder Markets analyst Matt Dalgleish said the Omicron induced workforce constraints on the processing sector are still impacting sheep and lambs being slaughtered.

He said analysis of average processing numbers of sheep and lambs during January show volumes are down 18 per cent on last year on the east coast, compared to 3 per cent in the west, which has been less affected by Covid-19 disruptions.

“Low numbers are more than just tight supply. It’s now just a matter of how long it takes to clear up,” Mr Dalgleish said.

“Price hasn’t been as impacted, trade and heavy lambs have had a slight price decline, but it hasn’t been significant.”

Mr Dalgleish said with most areas having a good season it shouldn’t be “a disaster” for most to hold on to stock to let processors sort out the workforce issues.

“Even though we are in the dry season for the south, here in the Western District there is still green grass underneath the grass that is drying off, that’s unheard of.”