A lamb to ram price ratio is a useful measure of how many lambs are needed to pay for a new ram. This measure gives producers a guide as to how much they will reasonably pay for a ram given the pricing level of the commercial sheep market. Using AuctionsPlus data, the Market Insights team has calculated a 7-year recorded average lamb to ram ratio of 19:1. This ratio was relatively consistent between 2016 and 2022, ranging from 14.9 to 22.1.
Key points
The analysis is not specific to any one breed or enterprise type and includes all breeds of rams and lambs. The analysis found a correlation of 0.74 which is quite strong, but not as high as the correlation of steer and bull prices. The R-squared of 0.55 is further evidence of a strong relationship between annual lamb and ram prices (Figure 1).
The average ram price in 2022 was $2,736 while the average lamb price was $136, leading to a ratio of 20.1. This ratio is higher than the 7-year recorded average of 19 due to higher flock numbers increasing the demand and therefore prices of rams, and higher supply of lambs reducing competition and therefore prices of lambs.
Figure 1: AuctionsPlus lamb vs ram prices, 2016-2022. Source: AuctionsPlus.
Like the steer to bull price ratio, the ratio in 2020 was below average at 15.8. Likely because commercial livestock prices increased so rapidly due to substantial rainfall following severe drought. While bull and ram prices increased more slowly due to the smaller female herds and flocks, keeping demand subdued relative to demand for commercial stock.
Ram prices are expected to ease from 2022 to 2023, however, not to the same degree as the commercial sheep market due to higher flock numbers supporting demand for joining sires. Should this be the case, we expect the lamb to ram price ratio to increase, meaning rams will be relatively more expensive compared to commercial lambs.
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