What a week it has been for the red meat industry, with price records tumbling for both cattle and lambs.
- Australian lamb exports are up 5 per cent this year, with the US the biggest customer so far
- Wet weather and a positive spring outlook have fuelled an already red-hot cattle market
- Analysts expect cattle and lamb prices will go even higher
New season lamb numbers are beginning to lift in saleyards across Australia and the prices have been un-baa-lievable.
The National Trade Lamb Indicator (NTLI) went above 950-cents-a-kilogram carcass weight for the first time.
It follows a record at Wagga Wagga where a pen of new season lambs sold for $331.20 each.
“As young lamb supply ramps up across the NSW saleyards and processors continue to dominate purchasing at the rail, supported by a soft Aussie dollar and surging international demand, lamb prices have reached record levels,” Meat and Livestock Australia said.
Also this week, a consignment of twin-bearing Australian white ewes sold for a national commercial record of $1,210 each.
Increasing US appetite for Aussie lamb
Despite issues with shipping logistics, Australian lamb exports are up 5 per cent this year, with the United States the biggest customer so far in 2021, taking 41,776 tonnes (swt), which is up 21 per cent on the same time last year.
“I’m on the record saying lamb is the new Wagyu,” meat analyst Simon Quilty said.
“Not because of taste reasons, but because it truly is starting to sit in that niche end of the market, and being somewhat resistant to fluctuations as commodities go up and down.
“Full credit to the US market, because they managed to build a strong retail trade and business around that and many Australian exporters were a part of that success.
Cattle prices rise again
Wet weather this week, coupled with a positive spring outlook by the weather bureau, has fuelled an already red-hot cattle market.
The Eastern Young Cattle Indicator (EYCI) surged again, hitting a new high of 1,031.52 c/kg (cwt).
“I never thought I’d see the day where we saw the EYCI and restocker lambs crack 1,000 cents/kg (cwt) in the same week, it’s a huge milestone,” said Stuart Bull, senior market analyst with Meat and Livestock Australia.
“We’ve had constant competition between feedlots and the restockers for some time, and that’s now expected to continue as we see heightened rainfall through spring.”
“We’ve also seen heavy steer prices get close to some record levels, which shows there is still [price] movement to go throughout the supply chain, which is continuing to instil confidence in producers.”
Mr Quilty agrees there is still room for prices to increase.
“I think the challenge for any analyst has been trying to pick where the top of the EYCI and NTLI is going, so to me I’ve almost given up on picking where the price will go,” he said.
Mr Quilty said a range of international factors had Australian beef producers in the box seat going forward including:
- Argentina reducing beef exports by 50 per cent
- reduction in Brazil slaughter
- rising US cattle prices
“Analysts in America are now saying the [CME Live Cattle Futures] price could go as high as 25 per cent in April-May next year, and so with rising US prices, it lifts Australian prices globally because we compete in 90 per cent of our markets with North America,” Mr Quilty said.