Analyst Intel

11 February 2019

ACROSS THE RAILS: Lamb tucker quality and quantity dry up

BySuz BremnerSuz Bremner

As a typical kiwi summer unfolds across the country the wonderful feed levels are diminishing and quality is dropping off. 

There is plenty of cattle tucker still around but the quality, short lamb tucker is burning off and crops are hardening, which has thrown caution into the store lamb market both at the yards and in the paddocks. 

The strong run of store lamb prices has seemingly come to an end with a turning of the tide seen over the last few weeks as buyers approach with more caution. That’s not to say interest isn’t high as there are still plenty of buyers coming forward but there has been a noted increase in resistance from the buying camp. 

At Feilding’s first sale for February downwards price adjustments for 32-34kg mixed sex and cryptorchid lambs averaged $5-$15 a head with cryptorchid easing by the bigger degree. Until then mixed sex were comfortably making $110-$125 and cryptorchid $115-$128 but the adjustments put them at $94-$118 and $103-$115, respectively. On a $/kg basis recent sales had the mixed sex trading at $3.30-$3.35/kg LW and cryptorchid $3.35-$3.43/kg LW. 

A similar scenario has unfolded in the paddocks around Hawke’s Bay, Manawatu, Rangitikei and Wairarapa where a large percentage of the North Island store lambs hail from. In Hawke’s Bay and Manawatu paddock prices of $3.30-$3.40/kg LW for 28-33kg have been common while similar weights in Wairarapa are trading at $3.20-$3.30/kg LW. There are not big numbers being quoted and there is still good interest though buyers are sticking to reduced budgets. 

Expectations are that there will be another easing in price before a happy medium is found between vendors and buyers. Lamb schedules through February-March are expected to remain well above average and will likely hover around the $7./kg CW mark but the higher prices paid for lambs earlier in the season does mean buyers have more cost to cover, which will mean tighter margins and smaller budgets to buy replacements. Also, of course, the weather will play a significant role in any future price adjustments.