Wednesday, April 24, 2024

Store lamb prices skyrocket

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Store lamb prices at Feilding and Stortford Lodge have been going gangbusters in recent weeks, with prices blowing the five-year average out of the water. AgriHQ senior analyst Suz Bremner says she has not seen prices anything like those being paid at this time of year before.
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Bremner says at the latest Stortford sale, male and ewe lambs between 32-34kg sold at an average of about or just under $4.80/kg, which is $1.40/kg higher than the five-year average.

She says as weights drop away, the price increase is even more significant, with 28-29kg lambs up $1.50-$1.60 on the five-year average.

That average includes the 2019 year, which she says is regarded as a benchmark because of the strong prices paid that year.

“I cannot recall a gap like this before. It’s quite mind-boggling,” Bremner said.

Bremner says in 2019 the current level of prices was only reached in October/November, so this year is uncharted territory, adding that at Stortford ewe lamb prices have jumped about $40 a head in the past fortnight.

Central Hawke’s Bay farmer Richard Ellis paid between $4.05-$4.25/kg for lambs at the latest Stortford sale and says the schedules available from meat companies are providing farmers with a level of certainty, which is better than waiting and hoping, although he is wary about a bottleneck in lambs heading to the works around September and October.

He says recent rain in Hawke’s Bay is being complemented with weather warm enough for grass growth, which is giving farmers some certainty around feed.

Farmers in the region also recognise the lesser footprint impact lambs have on paddocks compared to cattle, which is influencing what stock they want to carry over winter.

Ellis says another reason for the higher prices for lambs is that numbers available are well down over the past calendar year, so demand is high.

Manawatū farmer and stock agent Dave Wright agrees that the current high prices are because of contracts being offered by meat companies.

However, he is unsure whether the market is going to get much stronger.

“There might be too much heat in the market,” Wright said.

“It will come down to supply and demand and how much meat companies are willing to chase it.”

He says farmers still need to make a profit and the way prices are now, margins are very short.

“It all comes back to how high the schedule will go. I don’t think it’s going to get too far over $9, but we’ll have to see.

“Not all the meat companies are chasing heavy lambs.”

The high yardings of store lambs at Feilding and Stortford Lodge in recent weeks will also push up paddock prices but Wright says there won’t be much stock sold there.

“When prices get this strong there’s limited lambs available in the paddock because people are chasing the saleyard price,” he said.

Hazlett procurement representative Angus Hazlett says the good prices being paid by meat companies, with good contracts available until September/October, are driving up store lamb prices at sale yards, although he admits some of those prices are “huge”.

He says recent rain in Hawke’s Bay and subsequent grass growth is encouraging some Hawke’s Bay farmers to make a late run on store lambs, which means they are buying significant numbers of lambs at once, whereas they might have filled up their numbers sooner if they could have relied on earlier grass growth.

“There looks to be a bit of confidence as there’s some big money being spent,” Hazlett said.

He says the high sale yard prices are being driven by supply and demand.

“There’s a lot of people who are lamb finishers and not enough lamb breeders,” he said.

“It’s good that breeders are getting good money for store lambs.

“If those breeders are making good money from store lambs, then it’s worth them having ewes on the hills.

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