PROCESSORS could face a tough season with new figures showing the industry is expected to process 2.7 million fewer sheep and lambs in 2017 compared to the previous year.
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It couldn’t come at a harder time as national trade lamb prices blowout 35 per cent in the past four months to climax at 673 cents per kilogram carcase weight.
The speed of the price climb has been extraordinary, surging 57c in the past month, sustained by frenzied processing demand that has battled to meet processing kill space prior to the interrupted Easter auction schedules.
Regional indicators continued their impressive rise with trade lambs averaging 687c/kg in NSW, 679c/kg in Victoria and 598c/kg in South Australia last week, despite four abattoirs permanently or temporarily closing this season.
National Livestock Reporting Service recorded lightweight lambs which were sold to processors fetched $95 to $128 a head at Dubbo, NSW last week, while trade lambs earned $120 to $175 a head and heavy lambs a whopping $169 to $229 a head.
Lamb prices were mirrored at Forbes and Wagga Wagga, NSW later in the week, while in Victoria, Ballarat’s nearly 32,000 head lamb yarding tracked consistently above $200 a head for heavier conditioned lambs.
Light lambs traded up to $98 a head at smaller SA yardings, and heavier weights as high as $216 a head.
Mutton slaughter is set to be the second lowest on record, with a 1.2 million head year-on-year decline to 5.8 million.
Low supply is fanning the firing restocker prices which av 751c/kg nationally, or $114 a head.
The extremities were driven by interest in breeding ewes due to strong wool prices and low grain prices, Landmark livestock manager Peter Thomas, Dubbo, NSW said, with short supply set to keep prices buoyant for the remainder of the year.
Mr Thomas said quality of the yardings were varied.
“Lambs are either grain feed fat or western lambs that are drier and lighter – they are real good or no good,” he said.
“A lot of our clients are at the end of their run because you can only sell them once.
“January to March last year was the worst time to sell lambs, this year it is 100 to 150c/kg ahead.”
Meat and Livestock Australia’s market information manager Ben Thomas said there was a concern around the sustainability of the current price levels further up the supply chain.
“The current combination of factors in the market will lead prices to average alongside, or even exceed, the previous records,” Mr Thomas said.
“Once the number of sheep and lambs available for processing do recover, and if processing capacity remains reduced, there is the potential for a greater correction in prices than otherwise would have been the case.”