National sheep and lamb over-the-hooks (OTH) indicators have been on a downwards trajectory since June, with saleyard prices also following the same trend. The national trade lamb indicator (NTLI) averaged 694¢/kg carcase weight (cwt), a 47¢/kg premium to the national medium trade lamb OTH indicator, which averaged 647¢/kg cwt.
While a lag between price trends seen at saleyards and movements in OTH indicators is not uncommon, the rate of decline in saleyard prices has been far greater, with the NTLI down 255¢/kg cwt on the record highs seen in March.
Processor demand for finished lambs has lifted in recent weeks, on the back of increasing optimism in the domestic market after a prolonged period of uncertainty. However, lamb supply continues to exceed demand, which has kept a lid on OTH indicators. Elevated lamb supply saw eastern states lamb slaughter for the week ending 11 September lift 10% on the week prior to 347,500 head, 6% higher year-on-year.
In response to this supply shift, national OTH indicators have eased, with medium trade and heavy lambs at their lowest levels since March 2019, reported at 647¢/kg cwt and 649¢/kg cwt, respectively, for the week ending 18 September. National light OTH lambs followed similar trends, tracking down to 653¢/kg cwt, an eight-month low.
At state level, the Victorian heavy weight lamb OTH indicator tracked down 150¢/kg cwt on year-ago levels to 675¢/kg cwt for the week ending 18 September, albeit this was strongest state price for the week. The indicator also regained a premium to light OTH lambs following a brief period where demand for finished categories was subdued. New South Wales saw a sharper decline, pushing down 168¢/kg cwt to 620¢/kg cwt, while South Australia eased 153¢/kg cwt to 630¢/kg cwt. The Western Australia heavy lamb OTH indicator remained consistent with year-ago levels at 670¢/kg cwt, however, it now sits above the national average – a contrast to last year, where it was reported 100¢/kg cwt below the national average.
The national medium OTH mutton indicator averaged 527¢/kg cwt for the week ending 18 September, up 16¢/kg on the same time last year. Interestingly, despite little movement year-on-year, eastern states sheep slaughter for the year-to-date has tracked 35% below 2019 levels.
With the national saleyard mutton indicator back on year-ago levels (down 12¢/kg to 525¢/kg cwt), despite a 59% drop in total yardings, mutton prices at the saleyard and OTH levels continue to be buoyed by tight supply, however, this has been met with equally subdued demand.