- Lamb OTH indicators mirror saleyard price trends
- Heavy lambs trading at premium to other OTH categories
- Potential for winter supply to tighten further following the recent lift in yardings.
There is typically a lag between price trends seen at the saleyard and adjustments in over-the-hook (OTH) indicators. Consecutive weeks of elevated yardings has seen lamb prices at selling centres ease, with lamb OTH indicators following suit this week. Albeit, yardings have started to slow on the back of more useful rainfall and murmurs of a recovery in China. This may offer some support in the short term and help to halt the sharp price declines in recent weeks.
For the week ending 3 April, national trade lamb OTH indicators saw the largest week-on-week decline, back 26¢ to 788¢/kg carcase weight (cwt), while light lambs eased 23¢ to average 752¢/kg cwt. Heavy lambs regained a premium, following a brief period where demand for trade weight lambs overtook finished lambs, however still declined 14¢ to average 797¢/kg cwt. Processor demand for finished lambs remains resilient in the face overwhelming uncertainty, largely due to tightening domestic supplies.
In recent weeks, producers opted to offload stock and take advantage of the high prices on offer, driven by growing market uncertainty. The winter months were already shaping up to see reduced processor throughput, as a result of the poor conditions that prevailed in 2019. However, the recent spike in saleyard throughput suggests the contraction could be amplified through winter. Should this align with an improved global economic outlook, there would be scope for lamb prices to move higher.
State breakdown of key lamb OTH indicators for the week ending 3 April:
New South Wales:
- Trade lambs averaged 743¢/kg cwt, back 75¢ week-on-week
- Heavy lambs averaged 775¢/kg cwt, back 43¢ week-on-week
- Trade lambs averaged 840¢/kg cwt, back 10¢ week-on-week
- Heavy lambs averaged 840¢/kg cwt, stable week-on-week
- Trade lambs averaged 806¢/kg cwt, back 20¢ week-on-week
- Heavy lambs averaged 808¢/kg cwt, back 15¢ week-on-week
© Meat & Livestock Australia Limited, 2020
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