Analyst Intel

25 May 2020

ACROSS THE RAILS | Paddock prices adjusted by sale yard results

By Suz Bremner

The return of the sale yards really threw the cat among the pigeons when it comes to store lamb pricing, with results from all sales since level two well above paddock prices. The only way to sell lambs over lockdown was in the paddock and with no sale yards to set the mark, prices stayed largely stagnant over the seven weeks. The first few weeks were a time of readjustment to a new normal and plenty of uncertainty in everything while subsequent weeks felt a bit like no-man’s land. 

That was followed by the announcement sale yards would reopen in level two, which created a holding pattern for those last few weeks. Over that period a $2.60/kg LW average was not uncommon for males on both islands while ewe lambs traded about $2.40/kg LW. 

When the yards reopened that was set to rights, though, as the extra competition garnered from the physical auction environment along with a reduction in backlogs at the processors, which allowed their buyers to re-enter the market, increased the competition for store lambs.
Lambs at the yards are sold on a per-head basis but paddock prices are usually per kilogram so it is fortunate our LivestockEye weigh crates give us the ability to produce kilo prices to make a clear comparison. Paddock sales do not include the yard fees but demand has been such at the yards that any extra costs incurred to sell via this channel were offset. 

At the first sales post-lockdown in the North Island prices improved to $2.80-$3/kg LW only to be bettered over the past week by another lift to $3.20-$3.30/kg LW for the better males and ewe lambs. For the small entries of South Island lambs prices have been even better with Canterbury Park able to achieve $3.30-$3.60/kg for some lambs.
There are, of course, dry and drought-affected lambs that will not reach such levels and the next few weeks will determine if this is simply a honeymoon period or if these levels are here to stay.