The lamb industry is experiencing a shortage of lambs weighing more than 30 kilograms carcase weight, which are preferred by export processors for their higher meat yield and quality.
The main reason for this shortage is the low prices that processors have been offering for lambs, which have made it difficult for producers to grain feed and achieve higher carcase weights.
Grain feeding can improve the carcase weight, marbling, tenderness and flavour of lamb meat, but it also requires higher costs and risks for the producers.
According to one NSW lamb producer I spoke to, the current prices that the processors are offering for lambs are not enough to cover the costs and risks of grain feeding.
The lamb producer said he had opted to sell his lambs at lighter weights, rather than spending money on grain feeding, because the price fundamentals were not stacking up.
He said grain feeding was expensive and risky, and he needed a fair return for his labour and costs.
Many other lamb producers have also decided to sell their lambs at lighter weights, rather than grain feeding them, due to the low prices being offered by the processors.
This has resulted in a shortage of lambs weighing more than 30kg, which are in high demand by export processors.
According to the latest data from Meat & Livestock Australia, the average carcase weight of lambs sold in Australia in March 2023 was 23.2kg, which was 1.4kg lower than the same month last year.
The proportion of lambs weighing more than 30kg was only 9.6 per cent, which was 5.4pc lower than the same month last year.
The shortage of heavy lambs has also affected the prices of lamb meat in the retail market.
According to MLA, the average retail price of lamb in Australia in March 2023 was $18.90 a kilogram, which was 8.6pc higher than the same month last year.
The retail price of lamb was also higher than the retail price of beef, which was $18.60/kg in March 2023.
The lamb industry is facing a challenge to balance the supply and demand of heavy lambs, and to provide a fair and sustainable price for both the producers and the processors.
When crunching the numbers, producers have suggested 620-650 cents a kilogram carcase weight was a margin they could operate within and would encourage more producers to grain feed their lambs and meet market demands.
The demand for heavy lambs soared at Ballarat, pushing the prices up by $15 a head to $25.
The heaviest lambs attracted fierce competition and reached a top price of $219, averaging between 630-660c/kg.
The heavy lamb indicator settled at 563c/kg by the end of the trade, a rise of 59c/kg in a month.