In the shadows of record prime lamb prices is a concerning restocker market which has bottomed-out at less than $35 a head for sucker lambs.
A “dramatic” supply of store lambs from the Riverina has hit Victorian markets this week, more than six weeks ahead of the sucker flush usually experienced in spring.
A far cry from the record fat lamb prices experienced in the past month, Bendigo sheep sale made its own August record – yarding nearly 40,000 lambs and sheep, including 17,000 offloaded from drought-affected stations in the western Riverina. It’s a sharp turn of events from last week when the Bendigo Livestock Exchange yarded just on 600 sucker lambs.
But this influx of supply, and subsequent fall in prices, brings unprecedented opportunity for Victorian producers, Elders livestock operations manager Ron Rutledge said.
“We are seeing an exit of livestock that is traditionally seen in September and October – the numbers coming out is dramatic for the month of August,” Mr Rutledge said.
“Unfortunately from a Victorian perspective, it is still the dead of winter so those plates aren’t lining up. But anyone with the ability to replace stock and fatten lambs is faced with a fantastic opportunity that has not been seen for the last 15 years.”
Nearly half the yarding at Bendigo on Monday was predominantly crossbred, April-May drop, from drought-affected properties forced to destock.
While trade and heavy lambs continue to soar, reaching 781 cents a kilogram and 838c/kg respectively on Monday, restocker lambs prices showed the flood in supply. MLA market information reported a dive of 22c last week for restocker lambs, to 670c/kg, with mutton tumbling from 464c/kg to 433c/kg week-on-week.
Mr Rutledge said the finished lamb and restocker markets were a tale of two extremes, with the reporting service yet to reflect the true price tumble for light lambs experienced this week.
“We have lambs (under 18kg) making less than $35/head, which we haven’t seen for more than six years,” he said.
“When we see finished lambs making up to $300/head, there is immense opportunity from a fattening perspective – the exchange has never been so good.
“Backgrounders and feedlotters are turning off high-value lamb for a return that would stagger most people.”
However, the opportunities for Victorian producers is premature, with the lamb market’s supply kicking before pastures have entered spring growth.
Supplementary feed is a challenge with the state’s excess grain and hay supply heading north of the border to drought-affected regions.
But the destocking is expected to continue with nearly 40pc of the Riverina deemed in drought by the NSW Department of Primary Industries, and the remaining 60pc drought-affected.
Mr Rutledge said conditions had deteriorated significantly in the past six weeks, with southern NSW clients in “dire situations”, receiving from 20 to 40 millimetres of rain for the year.
“People north of the Murray are concentrating on their ewe-flock base only at this stage,” Mr Rutledge said.
“The exiting will be of the secondary lambs but with very low lamb marking rates, the surplus stock numbers won’t be excessive.
“Currently the market supply is operating six weeks in advance. Once we get through to October, when Victorians are in a position to buy stock, supply won’t be there.”
Absorbing the sell-off were buyers from south east South Australia, Wimmera, and irrigation regions.
“It is a week by week proposition. We need to highlight to the farming community that there are great opportunities to invest in prime stock that they wouldn’t normally be able to,” Mr Rutledge said.