Over-the-hook prices for lamb decline while cattle remain steady

Sheep and cattle prices direct to processors have experienced very different trends during the last two months.

With the above average number of lambs yarded, producers have been increasingly selling through saleyards rather than direct to processors this year. Over-the-hook (OTH) prices for sheep and lambs have unsurprisingly followed saleyard indicator trends with large reductions over the last few months. Meanwhile, categories of finished cattle have seen very little movement, as the market appears comfortable with the volume of finished cattle at current levels.

Sheep

National medium weight trade lamb OTH prices this week averaged 750¢/kg, unchanged on last week, but back 100¢ since the 22 July when it reached its 2019 peak. NSW had the strongest average prices directly to processors at 783¢/kg, with Victoria and SA at 775¢ and 776¢/kg respectively. WA processors are trading at a significant discount in comparison to their eastern counterparts, with an average OTH price of 665¢/kg.

There is often a lag between OTH grids and the current market prices seen in saleyards, particularly in a rising market. The national trade lamb indicator this week has averaged 794¢/kg, a 44¢ premium to OTH quotes.

Cattle

Since the week ending 22 July, heavy steers direct to processors have fluctuated less than 7¢, with prices this week nearly identical to two months ago at 544¢/kg.

Processors have seen cattle brought forward in good numbers despite the expectation for tightening supplies, negating the need for any significant price corrections. There have been small movements for heavy steers going to processors at the saleyards, with the national heavy steer indicator declining 10¢ on the week before, although saleyard prices remain 14¢ above direct prices.

Note: all over-the-hook prices are in ¢/kg carcase weight

© Meat & Livestock Australia Limited, 2019