RABOBANK’S monthly outlook warns anecdotal reports suggest seasonal conditions have delayed lamb finishing.
The bank’s report says in 2021, the number of lambs sold through saleyards picked up in February – Victorian numbers rose above the five-year average – as slower growing conditions prevented lambs being finished at normal times.
But Rabobank senior animal protein analyst Angus Gidley-Baird says suggestions are that this season may be the same, and with already larger numbers of lambs in the market this may cause some softness in the months to come.
At the same time, in grassroots markets, Angus suggests lamb prices have been volatile as they find a new balance.
He says trade lambs are hovering around the five-year average, with heavy lambs performing better and restocking and Merino lambs weaker than the five-year average.
He says it is clear the market has shifted from being producer driven to now being determined by meat trade and consumer markets.
“With larger numbers of lambs in the market it also means processors can be picky,” Angus says.
“Quality heavy lambs are still in demand, while lighter lambs and mutton are not getting much attention.
“With larger lamb numbers in the system, and delays to finishing, we expect prices could be softer over the coming month – particularly for out-of-spec lambs and mutton.
“Lamb slaughter numbers for the last quarter of calendar 2022 were 8 per cent higher, bringing the total lamb slaughter for 2022 to 21.4m head and a 3 per cent increase.”
Angus added sheep slaughter numbers for 2022 were 6.6m head, a 14 per cent hike on 2021 numbers.
He says weekly lamb slaughter numbers continue to remain strong – up 9 per cent for the first three weeks in February on the same period in 2022.
“Anecdotal reports suggest seasonal conditions have delayed lamb finishing again this year, and we expect to see larger volumes of lambs to carry through until later in the season,” he says.
At Thursday’s Ouyen sheep sale, demand for the 6352 head on offer – 4523 lambs and 1829 mutton – saw good quality lambs firm, while secondary lines were $5-$8 easier.
Mutton was also firm, and up to $10 dearer.
In the older lambs, those suitable for export made $190-$255 (740-780c/kg), with trade lambs realising $143-$190 (740-780c/kg).
Amongst the Merinos, lighter sheep went for $45-$75 (700-720c/kg), heavies saw $140-$210 (700-720c/kg) while the mutton made $40-$88 (330-380c/kg) for the lighter categories, with heavy Merinos seeing $90-$146 (330-380c/kg).
The Elders catalogue topped the sale with a pen of 28 crossbred lambs from Daalkolyn, Underbool, making $255, while MJ Lonergan, Ouyen, sold 27 at $246 and M&R Fitzgerald, Werrimull, saw their 85 crossies go for $243.
Top price in the BR&C/Nutrien Ag catalogue was $235 for 54 crossies from J Shaddock Farms Ouyen and 46 at $225 for AJ & JA & JA Morrish, Ouyen.
Also, in its monthly outlook, Rabobank says after a very wet 2022 for most of the Australian continent, the Bureau of Meteorology (BOM) expects the influence of major climate drivers to decline in the coming months.
The bank’s report says Bureau of Meteorology expects the El Nino-Southern Oscillation (ENSO) will return to neutral this year, after three consecutive years of La Nina.
With none of the seven international climate models currently predicting ENSO to exceed La Nina thresholds during February, rains should keep well below 2022 levels.
The Bureau expects the Indian Ocean Dipole (IOD) will remain neutral for the foreseeable future and hold little influence on local weather patterns.
