New data shows concerning forecast for spring lamb season

Record lamb prices won't guarantee quality stock this spring, with agents warning just 10-20 per cent of flocks will make kill grade due to autumn's dry impact.

Selling agents Steve Arentz and Sam Walker of Arentz Barker SRPL sold the first line of new-season lambs at Deniliquin on Tuesday, with the tops making $270.

The transition to new-season lambs is going to be slow with the impact of the dry autumn set to make quality suckers with weight and polish a rarity this spring.

Agents said the percentage of lambs which would make kill grade at trade to heavy weights this spring would be limited, some suggesting as little as 10-20 per cent out of a flock.

But ultimately how supply plays out will be determined by follow-up rain during the crucial August and September period, and the lure of the record price run for lamb which could encourage farmers to meet the market with stock at lighter weights.

While suckers have yet to appear in Victoria, there has been a dribble of supply in July through NSW saleyards including at Forbes, Griffith, Dubbo and Wagga Wagga – with Deniliquin yarding their first draft on Tuesday.

Price has been behind the early suckers being sold, with a 22kg lamb capable of making $265-plus at the quoted rates of around $12/kg carcass weight.

At Dubbo on Monday this week a small selection of 335 sucker lambs in the 22-24kg carcass weight range sold from $294 to $308 to be estimated as costing 1270c/kg by the National Livestock Reporting Service.

Griffith had its first pen of trade lamb suckers for the season last Friday, the line pictured on this page sold for $294 on an estimated weight of 23-24kg to make a solid $12/kg dressed.

The really big money of $10/kg to $13/kg for trade lambs has really only been in the auction system since early June, so less than 10 weeks. Translate this into the kill figures published by Meat and Livestock Australia and it means that out of the 13.2 million lambs processed so far this year only about 25 per cent have been sold in the window of that record money.

The point being there is a lot of lamb breeders out there keen to get a taste of these big money returns per kilogram for lamb which have never been seen in the industry before.

As $10/kg becomes the new psychological selling point for lamb, the interaction between price and seasonal conditions is going to shape the sucker season.

If feed remains tight and decent hay cuts and grain harvests are elusive, there could be more lambs sold at lighter weights as, to use the words of multiple agents, producers “take the money and run”.

Young and light store lambs have been commanding $150 to $230 at saleyards and on AuctionsPlus in the past week. The national online indicator for lambs is currently trending at $180 or the equivalent of 1240c/kg, according to MLA calculations. To put it in perspective, this time a year ago the average for store lambs was barely over $100.

Yes it’s a long way from a $300 to $400 return for a heavy finished lamb, but there is a lot of work and feed costs to turn a $180 little 15kg store lamb into a shorn and grain-fed 30kg-plus carcass weight prime lamb.

If regular rain keeps falling to create a feed bank heading towards Christmas, agents said more producers would be encouraged to hold onto young lambs for longer to add weight and value.

Ultimately, the universal feedback was the absence of an autumn break had done a lot of damage to new-season lamb growth and weight gain which would be hard to recover from.

NSW agent Anthony Mann of Elders Griffith said initial inspections of local flocks suggested drafting percentages for saleable prime suckers would be low.

“We’ve looked at flocks where you would be lucky to get 15 per cent off as suckers, and they are first-cross ewes, the percentages and weights of lambs off Merinos will be worse,” Mr Mann said

“From 1500 ewes you might get a lead of 200 suckers. The rain was too late and it was cold and pasture growth has been slow.”

Move into Victoria and the verdict is the same.

Bendigo agent Rupert Fawcett of Ellis Nuttall & Co suggested good suckers would be “few and far between” this spring, particularly in the early stages.

“The crops are looking OK now but there still hasn’t been much pasture growth at all,” he said.

Like other agents, he said a lot of young lambs had been early weaned this winter to try and make the most of limited paddock feed and to better target high cost grain and hay supplements. It also allowed producers to sell old ewes in the mutton market to take advantage of sheep prices of $6/kg to $7/kg carcass weight, and explains why sheep numbers have been fairly consistent this winter at saleyards like Bendigo.

“We could have some suckers by mid August but it will be dribs and drabs and a slow build to the new season sell-off,” Mr Fawcett said.

The Mallee and Wimmera are one of the early regions for sucker lamb turn-off in the south. McKean McGregor Ouyen agent Kelvin Fitzgerald said there had been significant seasonal impacts to sheep in the area.

He said the extremely dry conditions had forced a lot of producers to sell-down pregnant ewes, and the potential pool of young lambs from the area would be lower this season. A lot of lambs had been early weaned, and sheep feed in the area was still patchy.

“I can’t see this area supplying a big flush of suckers,” he said.

“A lot is going to depend on the weather – if it keeps raining and doesn’t get too hot early we might have some more finishing options.

“But if it doesn’t rain again properly (20mm plus) it could still be another long and hot summer and a lot of lambs could be sold off light, particularly if that money being seen on AuctionsPlus for young lambs hangs around.”