NSW lamb kill bucks the eastern states trend

Lamb slaughter in NSW is bucking the trend seen across the other eastern states in 2016, with indicative kill numbers for almost every week so far this year exceeding year-ago levels and tracking well-above the five-year average. 

In fact, in the third week of August 2016, the NSW lamb kill reached its highest weekly level (125,807 head) since NLRS slaughter records began in 1990.

Contributing to the rise in NSW slaughter was the reported better lambing percentages and seasonal conditions in parts of NSW, according to February and June MLA / AWI wool and sheepmeat survey results.

The figure below illustrates the NSW monthly lamb slaughter average (of weekly NLRS data) maintaining a considerable margin above 2015 as well as the five-year average since March, and highlights the 18% kick in supplies since the beginning of winter. The number of lambs processed in NSW has averaged 113,772 head per week in August – up 22% year-on-year and 21% on the five-year average.

In contrast, for most of 2016, Victorian lamb slaughter has been lower than last year. The figure below illustrates the 21% slide in the monthly average Victorian lamb kill from May through to August – and slipping under the five-year average for the past few months. For the final month of winter, lambs processed across the state averaged 133,353 head per week – down 18% from the corresponding month last year and 16% lower than the five-year average.

The lower slaughter this year was partly the result of lower lamb marking percentages, hot and dry conditions during the summer months, and some processors not operating at full capacity. The limited processing in Victoria has also partly contributed to the rise in NSW lamb slaughter.

Interestingly, lamb processing in SA so far this year has been fairly well aligned with the five-year average – although the monthly average slaughter has remained below year-ago levels for most of 2016. Following processing plant maintenance closures during July, supplies have started to ramp up again across the state. In August, the number of lambs processed averaged 57,761 head per week – 20% lower year-on-year and fairly similar (up 1%) on the five-year weekly average for the month.

Overall, eastern states lamb processing is lower at present, with the August weekly kill average down 10% on the same time last year and 4% from the five-year average, at 315,232 head.

With supply moving in different directions in NSW and Victoria over winter, the Eastern States Trade Lamb Indicator (ESTLI) has struggled to maintain momentum through August, falling from a high of 650¢/kg cwt earlier in the month, to 579¢/kg cwt at the close of yesterday’s markets.

In line with the historical seasonal trends and the June MLA / AWI wool and sheepmeat survey results indicating 9% more ‘expected lamb sales’ during spring, eastern states lamb slaughter is expected to keep rising over the coming months, which will continue to pressure the ESTLI.