Flock rebuilding shapes lamb market outlook

IN THE BOX SEAT: Livestock agents take the bids at the Wagga market. Picture: Nikki Reynolds
IN THE BOX SEAT: Livestock agents take the bids at the Wagga market. Picture: Nikki Reynolds

LAMB prices haven’t exactly come back to earth but they have certainly lost some momentum.

This is the message from Meat and Livestock Australia’s (MLA) market information manager Ben Thomas.

It is also market analysis that fits in closely with what buyers and vendors are seeing when they sell sheep and lambs at the Wagga Livestock Marketing Centre on Thursday. 

Mr Thomas said ewe numbers and climatic conditions were the biggest determinants to what we are seeing in the market at present.

And the flock rebuilding phase was also integral in predicting any outcomes or price parallels for the industry. 

Mr Thomas said there had been plenty of interest in the trade lamb indicator. In fact this indicator has dropped $1 since June and then jumped another 50c to show a volatility in the market for lighter categories. 

“Producer intentions are a key factor … particulary in how they rebuild numbers,” he said. 

How the flock is rebuilt is important:

  • Producers will either buy more stock as replacments, or
  • Retain older ewes, or
  • Hold onto younger ewes 

Mr Thomas said the plan to retain older ewes peaked back in February. 

And all eyes were on the slaughter figures particularly in regards to an industry ability to rebuild flock numbers. 

The industry in summary: 

MLA figures show that despite a strong first half of 2017, the outlook for the Australian sheep and lamb market for the remainder of the year is somewhat uncertain.

It has been a dry winter for many key supply regions across the country.

Processor capacity has been reduced with temporary and permanent plant closures, due to limited supplies over the past year. Many of the revisions to the August update of the Australian Sheep Industry Projections were influenced by heavier lamb and sheep carcase weights in 2017.