February 6, 2004

Australian Trade Weight Lambs Outlook Positive

Prices for medium trade weight lambs have been receiving the highest carcase weight prices recorded for some months at recent NLRS reported physical markets. 

With shorn lambs now accounting for the majority of lamb yardings at all saleyards, general quality has been promising with large lines of well finished trade weights penned at most centres.  Additionally, limited supply in these weight categories has recently appeared and consequently competition has been strong as wholesalers and retailers look to secure adequate numbers.

Shortage of supply is possibly one of the major factors behind the gradual upward price trend for trade lambs.  Producers holding stock back to achieve heavier weights maybe another cause of the limited numbers.  Furthermore, the effects of extensive offloading and processing during the drought may only now begin to have a noticeable effect on numbers. 

In comparing yardings for 18 to 20kg 3 score lambs, there is a 32% decrease in lambs penned on last January.  This has assisted carcase weight prices in the eastern states to be significantly higher, averaging 386¢, an increase of 35¢/kg cwt on last year.  The extremely dry conditions experienced this time last year would certainly have be a factor contributing to the larger yardings and less buoyant prices.  Interestingly, numbers for light and medium export lambs have increased slightly on last year.

A combination of limited supply and strong competition has created a current strong market for trade weight lambs.  With many wholesalers competing to secure stock and with numbers expected to remain tight for some time, the opportunity for a buoyant market could be sustained.