A shift in processor pricing has created positivity around South Island saleyards with store lamb values climbing as export values support schedule lifts.
The schedules’ upward move has ramped store lamb returns, and demand for heavier lambs in particular is clear as buyers look to cash in on promising late winter and spring schedules, AgriHQ analyst Sara Hilhorst said.
There is also the urgency to secure stock before store lamb supply drops further, despite there not being an abundance of feed available.
Hilhorst said there is good competition, particularly for 32kg and heavier male lambs with the limited supply of these pushing the market up closer to $3/kg.
Ewe lambs are not lifting at the same pace. Up to $2.80/kg can be expected on those that weigh around 32kg.
But in terms of value, agents are saying that although it has lifted it has to be noted it has come up from the lowest of lows and now sits at a more respectable level.
Hazlett livestock manager Ed Marfell said the increase in returns has not entirely stemmed from increased demand, but from decreased supply for what would normally be required.
The lamb kill is ahead and more finishers in Southland could kill lambs rather than have to sell store. This has also meant they have needed to replace lambs.
More recently there have been farmers drafting off their tops and sending to the works with the schedule lifts and they have then returned to buy replacements.
“There’s not new buyers. Farmers are typically buying their normal number, or slightly less according to feed supply.
“We can’t lose sight that the good types have held in value and the lighter types have been struggling over the past couple of months and now there’s not a lot of selection.
“A lamb that fits a programme is still good, bringing the lighter types into play now but off types; finer wool, carry-over ram and crypt lambs are still not so easy to move.”
Marfell said while the market may “strengthen a bit” throughout spring, any lift in schedules is not expected to be significant.
“I don’t see a huge light at the end of the tunnel. If it gets to $7, $7.50, late spring that’s where the season opens, and it only drops down for there.”
The positive may be the volume available come spring.
“Scanning is back on last year so if grass is in favour, there may be opportunity to hold on to lambs longer to get that bit more.”
Looking at the past five years the average $/kg at the same time, July 2019, was $4.10; 2020, $3.21; 2021, $4.58; 2022, $4.33; 2023, $3.56 and 2024, $2.92.
“It’s up and down and we need another dollar yet to get close [to the five-year average],” Marfell said.
In the season to date, 250,100 store lambs have sold via the Canterbury Park, Temuka, and Coalgate saleyards. This is 10% or 26,500 less than the same period last season.
Throughput peaked early from the dry conditions in Canterbury that pushed store lambs out.
This softened pricing and since then tallies have also eased.
Meanwhile the average lamb slaughter price is now firm around $6.50/kg.
Mutton prices have also made slight week-on-week increases this month, to $2.85- $3.05/kg.
Increased activity from export markets has flowed through to farmgate prices, as processors gain confidence in procurement competition while supplies diminish.
Hilhorst said this is promising for the winter kill, as export prices will support current schedules.
It is the European Union, United Kingdom, Japan, and the United States that are showing growth, as China continues to sit quietly in the background.
