Sheep prices may have begun their winter rally at last, following prolonged market pressure.
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As confidence waned, prices had continued to tighten but last week saleyards showed some positive signs and indicators began to lift, but are still around $2 to $3 below year ago pricing.
Light and restocker lamb prices have seen the best performance, with light lambs lifting 52c to 457c/kg as of Monday and restocker lambs up by 66c to 420c/kg.
Meat & Livestock Australia senior markets information analyst Ripley Atkinson said the recovery in lighter articles indicated buyers are chasing lambs to trade, following a generally favourable June rainfall period.
"There were a lot of areas that did get some amount of rain last week and that's provided a bit of confidence to jump in and buy those lambs," he said.
"Obviously with prices where they are at the minute and a decent pasture base out a little bit further producers obviously recognise there's an opportunity to make a trade on those lambs and that's why those market prices improved quite significantly."
Mutton was the lowest performer, although the indicator still lifted 18c to 339c/kg cwt.
National lamb slaughter at 437,749 head was the second highest volume since the first week of May 2019 and was also only just behind the volume recorded in the last week of May 2023.
Victorian lamb slaughter volumes have also reached their highest levels in more than five years.
National mutton slaughter is also well up from the corresponding weeks of 2022 and 2021, with a strong uptick in mutton slaughter expected from late July.
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Mr Atkinson said the supply of finished stock doesn't seem to slowing down at this stage but there could still be some price improvements on the horizon.
"As shown in our sheep projections, six industry analysts are forecasting the heavy lamb and trade lamb indicators to improve in price between now and September," he said.
"There's definitely been improvements in the market generally, supply has been a big part of that too."
"Yardings have been down, that's not unexpected but we're still processing seasonally high numbers of lamb and mutton.
"Despite the fact that saleyard yardings are down, the week before last was the second highest lamb kill numbers since 2019.
"Producers are still selling a lot of lambs direct to the processors so supply is still very high."
According to Rural Bank's Australian agriculture mid year outlook, lamb prices are likely to improve from current levels but remain well below the five-year average as high supply dampens the market.
Rural Bank senior agribusiness relationship manager for Ballarat Stuart Bear said good numbers of new season lamb markets were expected for the second half of 2023.
"As high supply continues, markets will be looking for direction from export demand which has been a mixed bag so far this year," he said.
"A drier outlook should avoid the challenges presented by the wet conditions of late 2022 which culminated in a surge of supply in recent months."