Large increases in new season lamb supply across most states last week as well as intense processor demand has seen prices for the influx of 2022 lambs perform extremely well, according to Meat and Livestock Australia.
Following a large volume of lambs last week, a tightening of supply saw prices continue to rise for 2022 lambs in SA to $184/head – their highest level since the first week of December 2021.
Currently, SA prices are operating 19% or $29/head above the three-year average.
Compared with the corresponding week in 2021, prices are firm while supply is softer by 58% or 8300 head. Dry conditions in 2021 saw new season lambs delivered early to market last year.
Favourable conditions promoting higher lambing percentages in 2022 and the larger lamb cohort expected will determine – and may place pressure on – significant price increases moving towards the end of 2022.
Meanwhile, a sharp uptick in Victorian new season supply last week saw prices soften marginally, with processor demand causing prices to stabilise compared with NSW.
Victoria’s new season lambs averaged $184 to be firm on week-ago levels, although these prices were 12% or $19 higher than the three-year average of $162/head.
Victoria’s new season lamb price performance for the remainder of 2022 will be influenced by the volumes of lambs contracted out of the paddock and delivered from interstate. This will determine price performance, dependent on processor demand.
In WA, prices for new season lambs softened by 10% last week to average $87/head as a result of stronger supply.
As WA processors continue to work through large volumes of lambs from the 2022 cohort, supply continues to place downward pressure on prices.
As spring continues, WA new season lamb prices will be determined by processor capacity and new season lamb supply.
Robust processor activity driving intense buyer demand for ready to process lambs pushed the NSW average price higher by $3 week-on-week to $189/head. This makes NSW lambs the most expensive lambs in the country, despite a 33% increase in supply. It is also the highest weekly price for new season lambs since mid-July, when just 336 head were yarded in the state and comes as 41,245 head were yarded this week.
The current NSW new season lamb price is operating 7% or $12 higher than the three-year average of $177/head.
Compared to the corresponding week in 2021, both price and supply are softer, reiterating a late arrival of new season supply in 2022.
Continued strong processor demand and their capacity to process large volumes of lambs will dictate price performance for NSW towards the end of the year.
MLA Senior Market Information Analyst Ripley Atkinson said looking ahead, new season supply was expected to arrive later than previous years and the current robust demand from processors for quality lambs was driving buyer competition and price.
“Saleyard price performance in each state moving towards the end of the year will be dependent a number of factors, including processor capacity to deal with larger volume of lambs than the previous two years, the number of lambs consigned to forward or direct contracts from the paddock and the finished quality of lambs, with higher quality and weight supporting stronger prices,” he said.
“The outlook on prices as the end of the year approaches remains favourable.
“However, due to larger volumes and the aforementioned factors, price performance may remain constrained.”
