More falls ahead as lamb prices soften

The lamb market has weakened and could be facing a difficult month amid reports key processors are booked ahead with stock being pushed off stubbles and summer crops.

Down time: Extra heavy and trade lambs are returning 130c to 150c/kg less than a year ago, when the COVID-19 pandemic began to take its toll on markets. Picture: Zoe Phillips

THE lamb market could face a difficult month amid reports major processors are pre-booked, with stock moving off stubbles and summer crops.

It comes as prices showed a much weaker trend late last week and at some sales in NSW earlier this week.

There were no auctions in Victoria on Monday due to the Labour Day public holiday.

Lamb prices at Dubbo in central NSW were quoted as $10 to $25 earlier this week with the main run of good ­tradeweights in the 22-24kg range dragged back under 800c/kg to average $184.

The noticeably cheaper trend hit saleyards late last week, with lambs at Swan Hill and Ouyen falling by $10 to $20 and the major Wagga Wagga sale last Thursday by $7 to $13.

Data from the National Livestock Reporting Service shows the heavy lamb indicator shed 30c in the past week, closing at an average of 807c/kg on Monday night.

However, reports show decent volumes of lambs selling below 800c/kg, particularly the extra-heavy exports over 30kg, which had a starting point of about 740c/kg at auctions in the past five days.

The trade lamb indicator (for lambs from 18-22kg) held its form a little better, slipping by 17c down to 831c/kg.

Both these saleyard indicators are now tracking 130c/kg to 150c/kg below this time last year, when lambs were trading strongly before the full force of the COVID-19 pandemic hit.

A surge in lamb supply appears to be affecting the market at present.

Feedback from buyers suggests there has been a push by producers to sell lambs off stubbles as paddocks are prepared for sowing, while further south in the Western District summer crops are starting to peter out.

In the past fortnight major exporters and supermarkets also offered forward-contract deals of 800c/kg to a top of 850c/kg (for top-end tradeweights) for lambs delivered in the next six weeks.

The Weekly Times understands these contracts were well supported, and some meatworks are now heavily booked for the next three to four weeks.

This means those companies will not need to be as active in the auction system for numbers.

Highlighting how it is supply affecting the lamb market, mutton values have continued to hold due to lack of sheep going to slaughter.

The national price indicator for mutton has eased by only 4c/kg in the past week, and earlier this week it was listed at an average of 653c/kg.

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