With the grain harvest underway in the mixed farming districts it’s time to review the first-half of the spring lamb selling season which by now should be completed, with keepers shorn to avoid the grass seeds.
Of particular interest is supply sold via the regular basket of NLRS - reported markets in NSW, Victoria and South Australia which for the five months til end of November is lagging 5.5 per cent below last year, and three per cent below 2014.
It could be strongly argued this is directly the result of the heavy destocking during 2014-2015 caused by the big dry. This is certainly backed up by lower slaughter numbers so far this spring which are five per cent below that of last year over the same period and almost 10pc less compared to 2014.
However, one aspect of the market, which is totally confusing given this year’s phenomenal season, which has produced an enormous amount of pasture feed and grain, that incidentally is currently priced at a 10-year low, is that breeders have had the choice this year of whether to sell normal numbers or hold a greater portion of their lamb-drop to value-add for the autumn/winter market.
Anecdotal evidence from talk around the saleyards suggests that while most producers have opted to take this year’s excellent spring market money for a larger portion of their lamb drop – bird in the hand so to speak. Others, and perhaps in greater numbers due to the abundance of feed and water have elected to retain a greater portion as carry over.
If the latter is actually the case or even if the status quo has prevailed it has been even more puzzling to learn from the NLRS market data that restocker activity in this early part of the selling season is operating at only half the rate of last year, and it is in fact the lowest restocker performance since 2012.
Restocker activity normally claims about 15-20pc of the NLRS basket of reported markets in any selling season’s first half.
But this year, oddly, restocker activity on a weekly basis has functioned at between six and 10pc of the weekly saleyard throughput, which begs another next question of the depth of the autumn/winter supply, and how much it is likely to be affected by the drought-driven ewe slaughter, which has caused the missing numbers in the selling season so far to date. It’s also confusing to fathom the thinking of the restocker market when store lamb prices to date have averaged almost $20 a head higher than last year, and yet projections as per current forward contract offers suggest a New Year market of 480 to 520c/kg, or 25 to 50c/kg below that of last year.
Of course this discussion does not address the anticipated imbalance in the trade lamb supply versus the abundance of export weights expected to favour the latter in New Year markets.