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WA lamb market set to tighten
28 May 2020
Key points:
- Western Australia lamb yardings back significantly year-on-year.
- Eastern states lamb market continues to operate at a premium to the west.
- National lamb slaughter considerably back on year-ago levels.
Lamb prices in Western Australia typically follow a similar trend to the eastern states, albeit with the east operating at a premium to its western counterpart. East coast restocker lambs have averaged a $56/head premium to lambs in WA so far in 2020, with heavy lambs on average $57/head dearer on the east coast. At the close of last week, restocker lambs in Western Australia averaged $100/head, $39 below the eastern states average. Similarly, heavy lambs in the west averaged $183/head, $33 lower than the equivalent in the east.
The split between the two markets is also reflected in the over-the-hook (OTH) indicators. This week, the OTH trade lamb indicator in Western Australia averaged 750¢/kg carcase weight (cwt), while the New South Wales OTH trade lamb averaged 783¢/kg cwt, with Victoria reported at 815¢/kg cwt.
An improvement in seasonal conditions in the eastern states early in the year saw demand for stock drive prices to elevated levels, which filtered through to the west. Demand from the east for restocker lambs saw an unseasonal spike in Western Australian lamb yardings in March, as many producers looked to take advantage of the high returns. Livestock have continued to head east given favourable trading conditions.
In recent weeks WA lamb yardings have remained subdued year-on-year. May yardings sit more than 60% below year-ago levels, which has been compounded by a recent improvement in conditions in the west. It is typical to see lamb yardings in both the eastern and western markets ease during the cooler months, which will tighten up the available supply for restocker and processor buyers in the short-term.
For the week ending 22 May, Western Australia lamb slaughter totalled 41,655 head, back 24% from year-ago levels, while eastern states lamb slaughter reported a decline of 8% year-on-year to 284,875 head. Historically, the west has seen lamb supply ease off until August, with prices trading at elevated levels during this period. Similarly, the eastern states lamb supply is expected to remain subdued until spring.
© Meat & Livestock Australia Limited, 2020
