Soft prices a tale of the weather and supply

On the radio in today the weather report included a brief from BOM saying that June has been the driest in Victoria since records began and its taking its toll on the price of lamb and sheep. East coast figures show price falls in all categories other than Restocker lambs on the week and Light, Heavy and Trade lambs are now trading lower than this time last year.

The Eastern States Trade Lamb Indicator dropped 3.8% this week to close at 625¢/kg cwt and National Mutton shaved off 5.7% to see it at 467¢/kg cwt. East coast supply metrics providing a clue to the weaker prices with lamb and sheep throughput and slaughter tracking well above last season and the longer-term average levels for this time in the year. Drilling into the figures on a state by state basis shows that NSW is leading the pack in bringing forward supply.

East coast lamb throughput up 2.5% on the week to over 197,000 head, and while the weekly change isn’t too earth shattering a look at the trend compared to this year and the five-year average shows it to be 35% higher than it normally is this time of year – figure 1. NSW lamb yardings are currently sitting 50% above the five-year average, with over 138,000 head going to the saleyards this week, clearly having an impact on the East coast figures.

A similar pattern displayed in lamb slaughter for the week ending 23rd June with a jump in head of 22% to just over 367,000 this week – figure 2. NSW, again the key state behind the surge with a 26% lift in lamb slaughter on the period. East coast mutton yardings levels dipped on the week, but remain persistently high when compared to this time last season and against the five-year average, figure 3.

The week ahead

A look at the rainfall forecast for the next week doesn’t hold much promise for a surge in prices with the best falls noted out at sea across the Great Australian Bight, Bass Straight and the Tasman Sea. The Tasmanian West and North-west will get some reasonable levels and parts of the WA, SA and Victorian coastline look promising, but for much of the sheep rearing regions it is going to be pretty light on. Happy end of financial year.