After succumbing to the elevated supply levels last week, the lamb market has made a healthy recovery, reported to be due to the wet start to May placing some pressure on lambs making it to the saleyards.
In a nutshell, before the improvement this week, sheep and lamb indicators across the board softened week-on-week.
Merino lambs lost 44 cents week-on-week as yardings increased by just over 2000 head while restocker lambs softened 60c, reaching the lowest prices seen in over a year at 748.7c per kilogram carcase weight (cwt).
Before the rain put a damper on yarding numbers, last week's official release of data were indicative of a large week on week increase in supply of lambs. East coast lamb yardings were up 18pc to 176,462 head, while sheep numbers lifted 32pc to reach 62,096K head.
But although indicators were flashing red last week, resilience was shown in mutton which held its ground despite a strong yarding of sheep.
Sheep yardings were up 38pc from the levels seen at the same time last year, indicating producers are finally offloading some of the older sheep that were held onto over the last season or two.
NSW sheep yardings were up last week by 40pc, with Victoria offerings increasing at 20pc.
The National Mutton Indicator (NMI) fared slightly better for the week, dropping just 9c or 2pc to 686c/kg cwt.
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Matt Dalgleish of Thomas Elder Markets recently did an analysis converting nominal prices over the last six decades into 2022 dollar values providing inflation adjusted historic pricing for the Eastern States Trade Lamb Indicator (ESTLI) and East Coast Mutton.
The all time peak deflated peak for the ESTLI was in August 1957, when it hit 1097c/kg cwt in current dollar values.
But the data revealed the all time inflation adjusted peak for east coast mutton occurred only recently.
"On a deflated basis, it was in March 2020 when the mutton indicator hit 738c/kg cwt in 2022 dollar values," Mr Dalgleish said.
"Currently the east coast mutton indicator is 590c/kg cwt, which is outside of the extreme range.
The long-term deflated average for east coast Mutton sits at 276c/kg cwt, in 2022 dollar values. Meanwhile, the 70pc range for mutton is between 130c/kg to 425c/kg cwt.
"Current mutton pricing seems a long way away from the normal range, as outlined by the 70pc region," Mr Dalgleish said.
"It begs the question if the growing offshore demand for mutton, particularly from China, could be pushing mutton pricing towards a new normal?"
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