Lamb prices break new records

At the risk of sounding like a broken record, lamb prices have once again broken records this week!

On Tuesday the 17^th of July, the Eastern States Trade Lamb Indicator (ESTLI) reached a new high of 744¢/kg carcase weight (cwt), driven by a waning supply of finished lambs.

Saleyard sheep and lamb indicators have been rising strongly since mid-April, with strong processor demand combined with a falling supply of finished lambs driving prices.

The ESTLI Indicator hit an all-time high of 733¢/kg cwt on Monday, only to rise 11¢ the very next day.

As has been reported for a number of weeks now, poor seasonal conditions combined with high feed costs have seen trade and heavy weight lambs at a premium to lighter weight categories. The falling supply of finished lambs comes at a time of unprecedented export demand. As a result, some producers are making the decision to continue with supplementary feeding programs despite the high cost.

Although little has changed in terms of market dynamics over the last few weeks, a closer examination of various market indicators paints an interesting picture.

Since 16 April, the ESTLI (18-22kg cwt) has risen 30%, while the heavy lamb indicator (22+kg cwt) has risen 35%, to 773¢/kg cwt. On the other hand, restocker lambs (0-18kg cwt) saw a comparatively modest increase of 11%, to 625¢/kg cwt. What this demonstrates is processor demand for finished lambs, rather than restocker demand, is driving prices. This is unlikely to change in the short term, with a lack of pasture added to a poor weather outlook forcing many restockers to sit on the sidelines.