Forward contracts are backing in lamb supply shortages

Forward contracts are backing in lamb supply shortages

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REGULAR BUYERS: Frank Nutt, Orroroo, SA, and Alan Lang, Carrieton, SA, at last month's Jamestown market.

REGULAR BUYERS: Frank Nutt, Orroroo, SA, and Alan Lang, Carrieton, SA, at last month's Jamestown market.

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The lamb market is continuing to climb towards the high winter peaks the industry has been predicting.

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The lamb market came out of two short weeks stronger again, continuing to climb towards the high winter peaks the industry has been predicting.

The National Trade Lamb Indicator opened this week at 717 cents a kilogram, well over 100c/kg higher than the same time last year.

It broke through 700c/kg for the first time in April ever just 10 days into the month, reaching its highest April price of 718c/kg just before Easter.

National light lamb (18-22kg carcase weight) prices have also broken 700c/kg for the first time in April, also peaking at 718c/kg last week.

Over the hook prices also increased this week, up 6-10c/kg for light to medium trade lambs in Victoria, and 13c/kg in NSW, averaging 692-700c/kg respectively.

Thomas Foods International is currently offering spot prices up to 680c/kg for crossbred lambs at Lobethal, SA, and 720c/kg at Tamworth, NSW.

But processors will have to up the ante as winter closes in, with Coles releasing a July forward contract of 830c/kg; this compares to their 690c/kg July forward contract last year from the supermarket.

H. Francis & Co agent Alex Croker, Wagga Wagga, NSW, said while it was always hard to tell, lamb numbers were definitely showing lower limits than usual.

"There is not going to be great numbers around, a lot of lambs are already gone, and yes there are contracts around for later on and there are abattoirs trying to make sure they have some supply coming in - 830c/kg is one that is there, and it is certainly good money, but are people going to have lambs to fill it?" Mr Croker said.

"I'd nearly think there could be less around than last year, and we saw prices go into the $9-$10 in the saleyards - but we couldn't expect them to put a forward contract out for those figures as they usually only last a couple of weeks.

"There are also a lot of light lambs getting killed, light trade and bag lambs, and that cuts out some that people would have fed them on for heavy supermarket lambs."

Even with forward contract having already reached 800c/kg for June, Mr Croker said most of their clients have sold out of lambs, with the handful left likely to go in the next month.

And despite missing the past two markets because of Easter and Anzac Day, he said Wagga Wagga will likely only yard between 30,000-40,000 lambs.

"For a yard that averages 30,000 each week, after missing two sales there would normally be up to 60,000 entered, but the figure will be below that," Mr Croker said.

Having also missed a sale because of Easter, Bendigo's sale on Monday also offered lower numbers, which helped lift export lamb prices $10 to $30 higher on the fortnight before.

The National Livestock Reporting Service (NLRS) reported lambs over 24kg carcase weight had the best gains, while general trade weight lambs also lifted $5-$12, selling from 700-750c/kg.

"The best of the Merino lambs, off supplementary feed and in higher value skins, also trended above 700c/kg carcase weight to reach $190 a head," NLRS quoted.

Across the border in Corowa, NSW, lambs of most categories lifted $7-$14, with heavy export lots averaging 731c/kg, according to NLRS.

Two public holidays in one week meant AuctionsPlus lamb numbers were also down with about 15,000 less offered than the previous week.

According to Matt Cotton, AuctionsPlus, Merino wether lambs sold from $64.5-$135, averaging $101.

Almost half the Merino wether lamb offering was made up of a line from Jigsaw Farms at Hensley Park, which averaged $89 with most purchased by a producer at Keith, SA.

"Crossbred lambs continue their stellar run with a 93 per cent clearance for the 3701 head offered," Mr Cotton reported.

"Prices ranged from 325-488c/kg and averaged 394c/kg, 12c/kg up on last week.

"The top price went to a line of mixed-sex Dorset Border Leicester/Merino lambs (27kg) offered by DG & PM Cummins of Taralga, NSW."

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