AgriHQ analysts are reporting store lambs as officially the most expensive they’ve ever been at this point in the year.
In the South Island store lamb prices have pushed well beyond historical trends and buyers are resorting to sourcing lambs from the North Island given the shortage of local supply.
Rain and feed, coupled with the continuing trend of solid schedules are crucial elements putting lambs in hot demand.
AgriHQ senior analyst Suz Bremner said grass is 100% responsible for where store lamb prices are currently trading, both in the paddock, on-farm and at the sale yards.
At the sale yards prices have been very strong, up $30-$40 on last year when conditions were dry and there was very limited demand.
“We have even seen an increase in the number of prime lambs also on offer at the South Island yards as farmers opt for that outlet over sending directly to the processors as auction prices are very competitive with schedule.”
Bremner said the larger volume of both prime and store lambs at the yards this week did mean prices eased a little, though for good mixed sex store lambs buyers still needed $110-$120.
The lighter lines are the expensive shopping though on a dollar per kilogram basis, as buyers work to per head budgets and are paying from $70-$105 for these types.
This means most are trading at $4.40-$4.50/kg liveweight, though $5.00/kg is also not unheard of on the lighter lambs, Bremner said.
In the South Island store lamb values have managed to punch $4 per head above 2011’s stellar market at similar average weights.
But AgriHQ analyst Reece Brick said a reprieve is about to give some breathing space.
“Buyers will be relieved to hear that it does look like we’ve reached a peak for the season.
“Lamb supplies are slowly falling more in-line with buying orders and a few buyers have been sourcing lambs from the North Island too, also helping to stabilise the market,” Brick said.
That’s not to say it’ll necessarily decrease quickly.
“Lamb numbers booked in for on-farm sales are well below last year with vendors instead opting to finish lambs themselves.”
With the cost of replacement stock very high and supplementary feed in oversupply, Brick said it’s easy to understand why.
“In the paddock lambs are varied but centred around $3.80-$4.00/kg with a premium of around 20c/kg in Canterbury compared to further south.”
Farmers with lambs ready to go will be weighing up the attractiveness of the money on offer now versus feed utilisation.
The weather will be the ultimate driver of the direction leading into Christmas.
“At this point, you would have to say that the market looks likely to remain in vendors favour through December.”
Meanwhile new season’s premiums come to an end in prime lambs last week, marking the beginning of the fall for lamb schedules.
The removal of the 20-30c/kg premium definitely took a bite out of the market.
“Pre-Christmas bookings are adding up as is tradition which is taking competitive pressure out of the market,” Brick said.
