Trade lambs finish May on eight month high

The late autumn surge in Australian lamb prices continued again this week, with the eastern states trade lamb indicator closing at 586¢/kg cwt – the highest value in over eight months.

While the extended hot and dry summer for most of Australia’s key lamb producing regions contributed to a sluggish market, late autumnal rain has spurred prices and producer confidence alike.

Further assisting prices has been the recent weakening of the A$, now hovering around 72US¢ compared to 75-76US¢ during April.

At various major selling centres this week, the market was generally stronger, and helped by many reporting lower offerings. There was also notable strong bidding for domestic kill orders at Bendigo and Ballarat.

Last week, eastern states lamb slaughter edged marginally above the week prior, and for the year-to-date, 7.59 million lambs have been processed – up 1% from the corresponding period last year. Kill numbers throughout May were in fact higher year-on-year for the duration of the month and evidently did little to dampen the recent price surge, especially in NSW.

Direct-to-works prices followed suit and also lifted in NSW and Victoria again this week.

The eastern states mutton indicator followed the same trend, finishing the week at an eight month high, at 381¢/kg cwt. Numbers processed continue to run below year-ago levels and for the year-to-date is 16% below the corresponding time last year, at 2.18 million head.

Considering the rain was a primary factor behind the May lamb price surge, the wet winter outlook for large parts of the country is likely to keep the market buoyant – provided it eventuates.