Useful rainfall across key sheep producing regions in Victoria and particular NSW has tightened up lamb supply.
There was an expectation for fewer lambs at the beginning of the year, however the recent rainfall has seen producers hold back lambs, with the prospect of further price increases.
Lamb yarding and consequently lamb slaughter have tracked lower at the start of 2020 compared to year ago levels and prices have responded accordingly.
On Tuesday, trade lambs were up 125c/kg carcase weight (cwt) on year ago levels to finish up at 795c/kg, with similar upwards trends seen in heavy lambs which were trading at 790c/kg, up 130c/kg.
As restockers begin to operate with more confidence and lamb supply remains subdued, restocker lamb prices rose to levels not seen since October last year.
On Tuesday, restocker lambs were trading at 865c/kg, up 215c/kg on the same time last year.
Eastern states lamb yardings have tracked lower in January totaling 471,650 head, back 14% (76,800 head), year-on-year.
The tail end of the spring lambs has slowed and combined with good January rainfall across the eastern states, a decline in yardings is not surprising.
The incentive for producers to hold on to stock to commence rebuilding flocks or await higher finished prices, will only increase should sheep producing regions receive more good rainfall in the week ahead.
The Victorian lamb crop entered the market slightly earlier in 2019, driving eastern supply upwards from September, however Victoria yardings have eased 11% to date in January compared to 2019 levels.
NSW and SA yardings have followed a similar downwards trend falling back 9% and 31% respectively.
Further price rises, will likely see lamb yardings increase and may result in some downwards price pressure in the short term.
However, through Autumn and into winter reduced availability of finished lambs is anticipated given the challenging conditions over the last two years.
Up to the week ending 24th of January, lamb slaughter has eased 10% year-on-year, totaling just over 1.3 million head.
This was largely driven by a decline in Victoria slaughter, which fell 3% albeit maintaining the highest state by state slaughter numbers for the month to date. NSW also saw a decline over the same period, falling 4% year-on-year, whilst SA slaughter dropped 15%.