Winter Chill Yet to Take the Heat Off the Lamb Market

With the first week of winter almost behind us, a review of the AuctionsPlus sheep and lamb market performance so far in 2021 has revealed some instructive trends in the face of the widespread restocking and rebuilding of the national sheep flock. 

While prices for most categories in May 2021 were below the corresponding month in 2020, any year-on-year comparison must consider the momentous change in seasonal conditions throughout the first half of 2020 – which went from devastating drought and bushfires in late summer, to expectations for bumper crops and full dams by June.

While restocking is still in full swing across most regions, the rain driven urgency and red-hot demand witnessed throughout mid-2020 has been tempered. Average Scanned-in-Lamb (SIL) and Station-Mated (SM) ewe prices for May 2021 were 14-22% lower year-on-year, with 57,446 head offered through AuctionsPlus. Similar annual price falls for May were registered for Merino wether lambs, first cross ewe lambs and Merino ewe lambs – down 8-16% year-on-year.

However, the demand for shedding and composite/other breeds had prices for these lines up considerably year-on-year. Shedding lines averaged 66% higher annually, boosted by big prices for future breeder ewe lambs, while composite/other breeds averaged 27% higher year on year. The May 2021 average for shedding ewes (NSM) increased 2% year-on-year, to $306/head.

While most prices are down year-on-year, historically they are still very favorable, especially with the recent encouraging winter rainfall outlook. Comparatively, the benchmark Eastern States Trade Lamb Indicator averaged 817c/kg cwt in May 2021, which was back 8% on the previous year (888c/kg cwt), but still 17% above the previous five-year May average (2016 – 2020).

State-by-State Snapshot

New South Wales has maintained its mantle as the largest online state for sheep and lambs, with 734,611 head listed for the first five months of 2021. Most notably, producers of the shedding lines sought to take advantage of continued demand for the category, with total numbers for January - May reaching 44,824 head - only slightly behind the entire 2020 calendar year total.

Even with an influx of supply, average prices for shedding breed lambs in 2021 is up 10% on the final half of 2020, averaging $337/head, with the categories biggest purchaser being Central West NSW, securing 32% of all purchases.

Additionally, increased demand for shedding breeds has highlighted the willingness of Queensland producers to head south of the border to secure the breed, which is growing in popularity, purchasing 12% of the Australian White lambs offered so far in 2021.

Looking to Victoria, 415,583 head have been offered online to date in 2021. Composite/other breed ewes so far in 2021 have averaged $271/head, with strong buying demand coming from the Riverina region of NSW, which secured 26% of the offerings. Crossbred lamb prices have been steady, averaging $160/head - with strong demand again received from purchasing powerhouses the Central West and Riverina regions of NSW, securing 21% and 22% respectively.

South Australia (178,773 head YTD) has followed similar trends to Victoria, with robust price across all composite/other breed categories, as well crossbred lambs. Composite/other breed lambs have been the largest price mover so far in 2021, averaging $219/head – with buyers from Southwest Victoria securing 26% of the category. The Merino categories have only seen slight movements, while shedding breed ewes averaged $284/head - helped by demand from Southern Queensland, which secured 32% of the offering.

Looking to the west of the country (92,871 head YTD), WA prices have eased back from the very high levels registered through the final months of 2020, when competition driven by eastern producers was at its peak. Comparing average prices for the first five months of 2021 with the final five months of 2020, composite/other breed lambs and shedding breed lambs have seen the biggest declines, back 44% and 46% respectively, to average $161 and $173/head. Recent rain in WA has seen a rise in local demand for younger stock, with crossbred lambs averaging $153, and Merino ewe lambs averaging $172/head.

For the 2021 year to date, Queensland sheep and lamb throughput on the platform has totalled 126,520 head – down 23% on the same period in 2020, with Merino lamb and ewe categories contributing most to the total consignment. Average prices received for the first five months of 2021 have remained steady, assisted by robust restocker demand in the southern states, with Merino ewe hogget prices averaging $241, while Merino wether lambs averaged $143/head. Northern NSW demand has been the main driver for the increased returns, with the Northwest Slopes & Plains region of NSW securing 20% of all Queensland lines offered.

Tasmania (35,051 head YTD) has recorded significant price increases for Merino wethers so far in 2021. Merino wether hoggets are up 25% on late last year, to average $164, while Merino wether lambs averaged $137/head. In contrast, Merino ewe hogget prices have taken a step back in 2021, averaging $271/head.

Breed Breakdown - Online Sheep & Lamb Offerings

The rise in demand for shedding and meat sheep breeds has been widely documented, with record prices set in 2020 and early 2021. The AMI team have investigated the top eight listed breeds for the first five months of 2021, compared with the same period in 2020. While the breeds making the top eight across the comparison periods have not changed, there has been a significant increase in the number of head listed for Composite, Dorper, Dohne and White Dorper Breeds.

While falling short of the top eight for number of head listed, the Australian White breed has seen a significant increase in online listings. The January – May 2021 period has seen 13,872 head listed, up 258%, or 9,995 head during the same period last year. The Central Western Region in NSW has listed 34% of the 2021 offering, with nine additional regions listing the breed compared with the same period in 2020.