‘Huge’ hit to lamb prices not on the cards, say experts

Lamb slaughter rates are down a bit in Victoria, but prices are expected to hold firm unless conditions change.

Lamb returns are expected to remain on a good footing unless there are greater Covid disruptions.

Despite all major sheep and lamb indicator prices falling in the past week, market experts aren’t predicting any “huge” drops in price unless conditions change.

And while there are pinch points — lamb turn-off numbers are starting to build and concerns are growing over Victorian metropolitan processor restrictions — the outlook is still relatively positive.

Thomas Elder Markets analyst Matt Dalgleish said sheep slaughter in Victoria fell when the meat processor restrictions were first announced, but the numbers had since recovered.

Lamb slaughter was now only “marginally behind” where it would normally be, by around 20,000 to 30,000 head fewer, per week.

“So there seems to be a bit of a battle for space,” Mr Dalgleish said. “But there doesn’t seem to be any real price impacts (at this stage).”

However, if restrictions continued through spring, worsen with outbreaks in plants or restrictions were also imposed on regional processors, a greater impact on price would occur.

“We do normally see a decline in prices through spring of 15-20 per cent; so we could see it decline 20-30 per cent if that happened, but I don’t think it will be huge,” he said.

“Where prices are now, the trade lamb indicator is still 200c/kg above last year, so there is room to move and prices would be likely to be still pretty good.”

The crunch would come when numbers swelled in October and November.

Meat and Livestock Australia analyst Stephen Bignell said Victoria had about half of Australia’s lamb processing capacity and NSW plants would be likely to be only able to absorb a small amount of any overflow.

All the major sheep and lamb indicator prices fell last week and continued that trend early this week, with the National Trade Lamb Indicator slipping 24c/kg to close on Monday at 915c/kg.

Restocker lambs came off 33c/kg to 947c/kg, which remains 152c/kg up on the same time last year.

Meanwhile, throughout the eastern states, livestock agent Mark Logan of RH Blake and Co at Wagga Wagga, NSW, said new-season lambs were slow coming in.

Mr Logan said at Wagga Wagga they were only yarding about 17,000 suckers whereas normally they would see about 30,000 at this time of year.

“There aren’t lot of numbers to go around, so I think prices will stay high, until we see those big numbers come in.”