The South Island lamb market is bucking this trend, as prices have been consistent over the past four weeks. Throughout February and into March, South Island store lambs have been trading for $2.90-$3.05/kg in the paddock, despite farm gate prices reducing by 20c/kg in those five weeks. This can be attributed to cropping farmers’ buying patterns for later born store lambs to control ryegrass, which could be offloaded as late as November, when historically higher farm gate prices allow for stronger margins.
Normally, cropping farmers would enter the market earlier, however, a wetter January kept them at bay but gave traders more confidence in the market. Because of this, the South Island store lamb market has had consistent backing through summer.
North Island store lamb prices have been varying by comparison to the South Island. Over the past five weeks, 32-35kg males have sold for $2.70-$3.10/kg. The top-end price has often dipped to $3/kg, and North Island buyers have started to favour lighter options as farm gate prices weaken and short-term buys become less attractive.
In addition to softening farm gate prices, hot weather has been another commonality across the islands. Dry conditions have been sustained for some time now and soil moisture levels are low in most regions. This is playing into North Island traders’ decision-making process on new lambs. However, South Island buyers remain undeterred and successfully absorbed a higher volume of lambs the past two weeks at Temuka, Canterbury Park and Balclutha.
Overall, while strength and consistency in South Island store lamb prices does not align with the market forces at play, it is usual for the South Island to lead the market at this time of year. Based on five-year average prices for February, we would expect a 10c/kg lead in South Island prices.
