21 Jun WA lamb catch the east
WA lamb producers have joined the party, with their lambs almost the same price as those on the east. For the east coast, it was either steady or lower for most sheep and lamb indicators.
Trade Lamb prices retreated further this week, but mutton managed to hold on. Some confidence seems to have come out of the restocker and feeder lamb market, but heavy lambs moved to a higher premium.
Of the eastern states indicators, it was only the Eastern States Trade Lamb Indicator (ESTLI) and the Restocker indicator which lost ground. Light lambs were already relatively cheap.
The last fortnight has seen the only real check in the rising market (Figure 1). The ESTLI has lost 44¢, mainly due to weakening prices in Victoria and South Australia. The price fall is a little reminiscent of the check the market had in August last year, before it went on to set new highs. We know supply is going to get tighter, the question might be whether processors are better off closing for a period, or to keep on killing.
Restocker lambs have also eased from highs, but have taken it a bit further. While 800¢ is still a great price for lambs, it’s not 900¢. Not surprisingly, the hardest lambs to produce are priced the highest. Heavy lambs held steady this week, the east coast indicator at 885¢/kg cwt.
Mutton has managed to hold its ground, suggesting it might be the smallest loser for processors at the moment (Figure 2).
In an indication that the export market is coming to terms with lamb prices over 800¢, WA markets have caught up to those on the east coast. The WA Trade Lamb Indicator hit a new high of 862¢ this week, a lazy 310¢ above the same time last year.
We need to remember it is still only June, and while sheep and lamb supplies are tighter, they are nowhere near winter lows. As such prices should find a base soon, and possibly take another leg higher.
There doesn’t appear to be a lot of downside for sheep and lamb markets, with lambs likely to hit the market as they come ready, but supply won’t be enough to see it fall too far.