There has been a noticeable lift in weekly lamb processing volumes across east coast abattoirs in the last two months. Lamb processing volumes for the last eight weeks have averaged levels that are 28% higher than over the same period, compared to the five-year average trend. Last year lamb processed was elevated during August and September too, but current levels this year are still 12% higher than what we saw in 2022.
This suggests that processors on the eastern seaboard are working hard to get through the current glut of lamb and anecdotal reports suggest processor capacity is running at around 80-85% with access to labour still acting as a bottleneck in some regions.
Sheep slaughter has been elevated for much of the 2023 season too. Meat & Livestock Australia east coast average weekly sheep slaughter volumes are running almost 50% higher than during the same time in 2022 and the national quarterly sheep slaughter figures from the Australian Bureau of Statistics show that for the first half of 2023 sheep slaughter is nearly 70% higher than the levels seen over the first half of 2022.
However, there is likely more supply to come as the Victorian spring flush of lamb is just starting to flow. Recent Victorian lamb yarding levels pushed toward 43,000 head, which is the highest it has been since the end of June 2023 and 70% above the winter lull in lamb throughput. Although, it is useful to keep in mind that the big lamb volumes are still yet to come.
Based on the five-year average pattern, weekly Victorian lamb yardings into October tend to range between 50,000 to 60,000 head, increasing toward 70,000 to 100,000 head into November and peak at around 130,000 to 160,000 head per week into December. The surge in Victorian lamb throughout over spring can see the total east coast lamb yarding levels swell from around 175,000 head per week in late September to 250,000 head per week into late November/early December.
Hopefully processors will still be working hard by then to keep lines running efficiently and backlogs remain at a minimum, I don’t think sheep producers can withstand too much more price pressure if lamb and sheep supply continues to weigh on lamb and sheep values.