Lamb prices resilient

Sheep and lamp prices stay strong

Sales
Aa

Numbers sound despite conditions

Aa

The sheep and lamb market prices appear to be resilient for the coming year according to Thomas International Foods National Livestock Manager for Sheep and Lamb Paul Leonard. Queensland numbers are sound, despite the trying conditions. The development of the exclusion fencing in Queensland will no doubt provide a significant growth for numbers and Mr Leonard sees South West and Central West Queensland as growth areas over the next five years given reasonable seasons.

Currently, both of TFI’s processing facilities, Lobethal (South Australia) and Tamworth (New South Wales) are at full capacity. In fact, both plants combined are processing in excess of 100,000 sheep and lamb a week.

“Southern Australia, especially our Lobethal plant, has seen a significant amount of autumn drop lambs enter the market, as producers become wary of older lambs beginning to break teeth, Mr Leonard said. 

“Now, Lobethal’s supply stands three weeks out in front, with bookings now being taken for four weeks forward. The northern area is also experiencing similar numbers of supply, with our Tamworth plant also three weeks forward, a result of the continued dry conditions throughout New South Wales and Queensland.”

With respect to the livestock processed at Tamworth, Mr Leonard recently has recently spent three weeks in New England and the new season lambs are certainly showing effects of the big dry. The only areas that saw a reasonable season stretched from Glen Innes and Guyra. Unfortunately, most of the New England out to Inverell and south to Tamworth was extremely dry. Considering the season however, supply of prime lambs remains steady and good quality.

There was a large number of mutton processed in the last six months due to deteriorating seasonal conditions. The effects of the big dry are beginning to show, as mutton is getting lighter by the week, especially from the supply areas of Western Queensland, NSW and New England.

Most of the New England out to Inverell and south to Tamworth was extremely dry. Considering the season however, supply of prime lambs remains steady.

Most of the New England out to Inverell and south to Tamworth was extremely dry. Considering the season however, supply of prime lambs remains steady.

Part of the reason that TFI have strong supply currently, is the result of January and February contracts released in October and November 2018, hitting $8/kg dressed. This has has proven to be positive for producers who accepted the price.

“TFI only took a certain percentage of their kill at that time in at the contracted level but this was enough to underpin supply of prime lambs. Combined with over the hooks bookings, this has allowed TFI to be less reliant on the major lamb sale yards over the past six weeks than we may otherwise have been.

We recently released contracts for April, May and June. Prices were fixed around the $7.60/$7.80kg dressed was well received by producers. In fact, all positions were closed Friday,” said Paul.

Current major lamb markets (Wagga Wagga – Forbes - Dubbo) have seen over the past week prices soften to the $5.80-$6.30kg dressed. TFI is currently paying approximately $7kg dressed delivered Tamworth.

Supply of both mutton and lamb is expected to be tight going forward as we move in to the winter period and this is the result of the increased slaughter over the last 12 – 18 months with the dry conditions.

Both domestic and global demand for Australian lamb remains strong and the recent price correction has seen some price relief at the retail level. This will go well in the long term as lamb is currently the most affordable than it has been over the past 6-12 months.

According to Mr Leonard,  “With the Australian flock currently sitting at 65.2 million head, it is simple arithmetic that demand will most certainly outstrip supply. When the season breaks, the concern may well be not so much supply of lambs, but an oversupply of processing capacity, particular in the eastern states of Australia. I would expect to see some processors winding back kills. In some cases, processors may potentially drop days and in the extreme, some closures may be seen as we enter late winter and spring, especially if there is not a seasonal break in the near future.”

Aa

From the front page

Sponsored by