Lamb over-the-hooks indicators push higher

National lamb over-the-hooks (OTH) indicators have notably increased in recent weeks. With intentions to rebuild holding strong in large areas of Victoria and New South Wales, tight supplies have meant both OTH and saleyard indicators moved at historically high levels.

For the week starting 7 December, the National Medium Trade Lamb OTH Indicator lifted 16¢ on the previous week to 714¢/kg carcase weight (cwt), in line with last year’s levels. The main driver of this increase has come from Victoria, which pushed to the highest level since August at 713¢/kg cwt.

Intensifying restocker competition for available lambs has seen OTH indicators track up. While a larger spring lamb crop combined with higher marking rates has meant more lambs on the ground, fewer numbers are moving through the supply chain as producers focus on their flock recovery.

The National Light Lamb OTH Indicator has regained a premium over the National Heavy Lamb Indicator, trading at 735¢/kg and 716¢/kg cwt respectively. Processors have continued to source lighter categories in response to COVID-19's demand impacts, which have affected both domestic and offshore markets. Total lamb exports are down 7% for the year-to-October, while mutton exports have eased 21% for the same period.

With producers primed to feed lambs for longer and to heavier weights, especially in key sheep producing regions in Victoria and New South Wales, more heavy lambs are expected to hit the market in coming months. This could mean the price disparity between light and heavy lambs diverge further, especially if subdued global demand continues.

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