Trade and heavy lamb prices converge at remarkable $12/kg

Positive signs are all over the lamb market until at least October, with forward prices of $11.50/kg being offered. See the latest.

Lambs are creeping closer to a $12kg average. Picture: Yuri Kouzmin

Trade and heavy lamb prices are creeping closer to a remarkable $12/kg average.

And there is just 4c/kg difference between the trade and heavy lamb indicators.

The national trade lamb indicator was trading at 1157c/kg carcass weight on Tuesday – just 43c/kg away from the huge $12/kg price. It’s also up 23c/kg in a week and 313c/kg higher than the same time last year.

The national heavy lamb indicator was at 1161c/kg on Tuesday, up 29c/kg in a week and 284c/kg higher than last year.

What’s unusual about the current spike is how close the trade lamb and heavy lamb indicator are to each other.

Before the current price rise, which started at the end of May, the heavy lamb indicator was 27c/kg dearer than the trade category, while in January there was about 40c/kg difference.

Southern NSW lamb producer Tony Rutter from Tarcutta said there are positive signs in the market until at least October, with forward prices of $11.50/kg being offered.

“It was my prediction that prices would get to $10.50/kg in winter, and that was just based on the number of people who had sold half of their ewes and the pressures of the drought in Victoria and southern NSW,” he said.

Mr Rutter said the slaughter level was way too high, and supply was always going to be an issue.

But in accounting for the extra $1.50/kg that lambs have made over and above any initial predictions, he concedes that while welcome, it may have “caught me out a little bit”.

“It will be interesting to see how long it lasts and if processors start cutting their kill in half,” he said.

“The fact that prices are going to be at $11/kg until October means you can throw some money at them with some feed,” he said.

Mr Rutter said a 50kg lamb was costing around $5.60 a week to feed.

“The interesting part is that lamb is going to put on two kilograms of body weight in a week, minimum,” he said.

“And half of that is going to be meat ... and you are going to sell the kilograms of meat for $11.50/kg based on the current market.”

Mr Rutter has a consignment of trades and extra heavies to sell at the Wagga Wagga market on Thursday and was hoping for values to hold ground.

Tony Rutter from Tarcutta in southern NSW will sell some lambs this week. Picture: Nikki Reynolds

On Thursday last week the Mickan Brothers of Walla Walla in southern NSW sold lambs for a national record of $440.20 at the Wagga Wagga market.

Then, on Monday they sold another consignment of second-cross Poll Dorsets through the Corowa sale for $421.20. The lambs weighed 71.7kg liveweight for a dressed weight of 36.5kg.

Marrar prime lamb and seedstock producers Garry Armstrong said things were looking positive in the industry for quite some time.

“For those who have stuck in the industry, they are being rewarded,” he said.

Mr Armstrong sold trade lambs, not finished on crop or grain, through the saleyards last Thursday and received $300.

“It was good to see that money without having to feed them,” he said.

“But for the top end where there is a combination of good genetics, and lambs that are well finished and well bred the rewards are there.”