Only way is up for lamb market

Prices showed resilience in spite of the fact producers rushed to cash in on a rising market before the Easter and Anzac Day break stopped sales and slowed down processors.

The ESTLI now sits 147c/kg above the same time last year, having jumped more than 70c/kg in the past four weeks.

Over the hooks prices also rose this week, with Victoria trade weight lambs averaging 690c/kg, while South Australia and NSW averaged 680c/kg, rising 13c/kg to 40c/kg.

All signs pointed towards a dip in lamb supply by this point of the year, as a consequence of drought, however that hasn't been the case. Lambs taking longer to get to sale weights from lack of feed, and an increase in Merino wethers on the market that would usually be live exported, could have impacted lamb supply.

Meat and Livestock Australia said for the year to April 5, eastern states lamb slaughter averaged 360,000 head a week, up 2 per cent year-on-year.

But national lamb yardings were down more than 400,000 head for the first quarter.

This likely impacted the ESTLI averaging 31c/kg higher for the first quarter of 2019 than for the same three months in 2018 - the highest average on record for that period.

Increased export orders are lifting demand.

MLA's market information team said historical data showed prices would be dictated by supply.

"A look back at 2018 demonstrates just how responsive prices can become when supply levels change," MLA said. "For the month of May 2018, eastern states lamb slaughter averaged in excess of 400,000 head per week, while the ESTLI averaged 604c/kg carcase weight.

"By August, slaughter had fallen 31pc to average 280,000 head per week, as deteriorating seasonal conditions hampered the supply of finished lambs."

Alex Collins, McKean McGregor, Bendigo, said the trade lamb had strengthened in the past fortnight, and there had also been a spike in the heavy end.

"We've seen heavy lambs come forward that haven't been protected by forward contracts and producers have decided to come forward after holding," he said.

"But on Monday at Bendigo extra heavy lambs were making 600-640c/kg in cases and that is still 120c/kg shy of some of the [recent] forward contract money."

New South Wales' agents suggested the influx of lambs were just as much due to timing, with older lambs bought for the trade now approaching hogget stage And, of course, anything that is ready at the moment, given the season, is not retained as it costs too much for feed.

Forbes Livestock and Agency Co agent Randal Grayson, said the continuing strong market flushed out good numbers and this week's sale on Tuesday realised prices for domestic Greek Easter market specialty Muslim Kill (MK) lambs, 12-16kg making up to 900c/kg, or around $110 to $120 for light Dorper type lambs with good cover.

At the same Tuesday sale trade lambs were making 750c/kg while export lambs brought 680c/kg.

Meanwhile patchy rain around the Forbes district meant few producers were willing to hang on to fat trade lambs once they reached the target weight.

"In years gone by when there was grass cover some producers would hang out for winter hoping for a price rise but this time around contracts have been strong all the way through.

"With 90 per cent of lambs finished on grain at more than $400 a tonne no one is prepared to leave them on the feedlot. As soon as they get to their goal weight they're going, not hanging around.

"Of course, it's a big paddock and we've never run out thus far. If it rains that will put the most pressure on this market we have ever seen."

Mr Grayson said if that scenario developed prices would shoot past their highs of last winter.

Mark Logan, livestock manager with RH Blake and Co, Wagga, said producers of fat lambs were not holding back from the market.

"In a season like this one when feed comes on a pallet, when lambs are ready to go they are sold," he said.

"A lot of lambs are coming to hogget stage and its been a tough season. While we've had a couple millimeters of rain, enough to freshen some Lucerne, it is not much."

Mr Logan said contracts had so far been strong enough that a few willing punters were making money simply from buying out of the saleyards.

"Lamb's only going to get dearer as we come into winter and we start to see a shortage of supply," he said.

James Tierney, Riverina Livestock Agents, said he expected a certain price rise through winter rising back to where it was last August.

"Unfortunately there will not be many producers in a position to take advantage of that price," he said. "That's the reason the price will get there.With this season it's been the cost of getting them there and it has been expensive without rain. It has certainly not been a "gimme"."

Indeed, not everyone is winning. Atop the New England Tablelands, at Ben Lomand, Graham and Warren Lockyer, as with others in the district, missed out on the best contracts after Woolworths halted processing through Thomas Foods International at Tamworth, killing at Junee instead. The extra 800km journey cruelled northern producers and Guyra saleyards' prices are up and down.