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Mutton firms despite elevated supply 1

Mutton firms despite elevated supply

A bit of a mixed bag for lamb price movements this week across the Eastern states, with Restocker, Trade Lambs and Mutton the only categories to see a price lift. Mutton prices remained remarkably strong in the face of elevated yarding and slaughter throughout much of March.

Mutton firms despite elevated supply 3

NSW saleyards are where the bulk of the sheep are being presented, with average weekly throughput levels during March sitting 43% above the five-year trend and 30% higher than in 2018. The increased NSW mutton yarding has helped to lift the overall East coast levels during March to see average weekly levels trending 22% above the March average pattern – Figure 1.

Throughput is not the only elevated supply measure for mutton with East coast mutton slaughter also remaining elevated during March – Figure 2. Both NSW and Victorian mutton slaughter are contributing to the increased East coast total slaughter. Average weekly NSW mutton slaughter during March have been running 27% higher than the five-year average, while Victorian mutton slaughter has been 23% higher. The two states combining to see East coast slaughter averaging weekly slaughter levels that are 11% higher than the five-year pattern.

Despite the weight of supply, mutton prices managed to gain nearly 5% this week to creep back above 400¢/kg cwt, closing the week at 413¢. The prospect of rain from tropical cyclones pushing further into the southern regions in the coming week also seemed to spur on Restocker Lamb prices to see them gain over 4% to close at 644¢ – Figure 3.

The benchmark Eastern States Trade Lamb Indicator (ESTLI) managed a milder 1% lift to see it close at 647¢/kg cwt.

What does it mean/next week?:

Remnant moisture from the cyclone activity in Northern Queensland is expected to make its way into Southern regions this week, with NSW benefitting from 10-25mm falls across much of the state. It is probably not heavy enough, nor going to be sustained for long enough, to make a significant impact upon price while supply remains elevated but could encourage some minor gains.