Market watch: sheepmeat

The Eastern States Trade Lamb Indicator (ESTLI) has tracked below 2017 levels since early March and the lack of a decent autumn break continues to put pressure on the market.

Supply

Eastern states lamb slaughter has seen an increasing trend over the past month, totalling almost 1.48 million head – up 19% year-on-year, although tracking closely to 2016 levels.

In contrast to 2017, this year has seen continued dry seasonal conditions in the south, which have been a contributing factor in the offloading of stock, with the largest increases seen in major sheep producing regions. NSW saw an increase of 30% year-on-year, totalling 426,125 head, while Victoria processed 818,448 head, up 29% on year-ago levels. Meanwhile, SA has seen a decrease in the number of lambs slaughtered in April, by 21%, totalling 199,247 head.

Eastern states sheep slaughter has seen a similar trend to lamb, tracking very closely to 2016 levels, totalling 427,995 for April, up 34% year-on-year.

National lamb saleyard throughput for April increased 8% year-on-year, totalling 789,466 head. The drier conditions seen this year were a driver for this increase. NSW saw the largest increase, up 27% on year-ago levels. Numbers at Dubbo jumped 53% to 87,420 head for the month, and Forbes saw an increase of 35%, to total 93,300 head. Victoria saw the opposite trend, with April throughput back 21% year-on-year, to 170,064 head, with numbers down at most of the NLRS reported saleyards.

National sheep saleyard throughput for April has seen a massive increase from 2017 levels, increasing 53%, to 361,434 head. NSW again saw the largest increases here, at 209,333 head, up by 78% year-on-year. Dubbo and Forbes again saw large increases, doubling and tripling their throughput of 2017, up 97% and 215%, respectively. Victoria also saw an increase in sheep coming through the saleyards, up by 56% on 2017, totalling 80,795 head for the month.

Prices

The ESTLI has tracked below 2017 levels since early March with the lack of a decent autumn break pressuring the market. The Indicator opened April at 613¢, before easing to 571¢/kg carcase weight (cwt) on 19 April – the lowest point of the month.

During the second half of April, the ESTLI has rallied despite strong supplies, finishing the month above the 600¢ mark – at 604¢/kg cwt. A softer Australian dollar has assisted export demand, in keeping Australian product competitive in international markets while domestic prices remain relatively strong.