Why similar weight lambs are selling at a $50 discount

Prices for some lambs are $50 different despite being the same weight. We take a deep dive on the reasons why.

A surge in lamb values is rewarding only the highest quality stock as prices range by as much as $50 in the same weight range.

And as processors look to saleyards to top up rather than source a large proportion of their needs, it’s allowing them to be picky when it comes to spending.

At Bendigo on Monday, lamb prices hit $270 and eight pens of extra heavy export lambs made $250 or more.

But at the same market, the National Livestock Reporting Service noted heavy lambs made from $171 TO $219, a range of $48 and trade lambs sold from $135 to $170, a gap of $35.

“While select trade lambs made over 700c/kg carcass weight (at Bendigo), the majority were still under 680c/kg carcass weight amid a very mixed run in terms of breed, quality, type and number in the pen,” the NLRS said.

Bendigo agent Alex Collins from McKean McGregor said some processors would only be looking to source 10-15 per cent of their kill needs at the moment from the saleyards as they had supplies booked direct from producers.

“Because they already have a lot of their numbers, processors can afford to be more selective in the saleyards,” Mr Collins said.

But there was also the issue of the cost to kill lambs, which was playing into what buyers wanted.

“Everyone has a high cost of kill, and they want to be able to get as much weight as they can from a carcass (to offset this cost),” he said.

“With some of the secondary lambs, which could have gone to an export market, there is not the margin in it.”

Mr Collins said the gap between the best and secondary lambs at the moment was due to the quality of the carcass, and given the large supplies, the gap was widening especially for lighter trade lambs.

Mecardo analyst Olivia Agar said there were reports from major markets like Bendigo and Wagga Wagga that lamb quality in saleyards was “very mixed”.

And there were signs that high quality, well-finished lambs were becoming harder to find.

“Looking at the total number of lambs through the yards and weekly slaughter rates which are at new highs, we’re yet to see supply pull back,” Ms Agar said.

“However, on the finished end of the market, lamb supply is beginning to wane which should continue the upward pricing trend ahead.”