THE good times for lamb appear to be over, at least in the short-term.

Lamb prices recorded their fourth successive week of falls last week.

This follows what had been four months of buoyant prices and an optimistic outlook for the trade.

At the end of last week, the Eastern States Trade Lamb Indicator was down to 380c/kg carcass, a fall of 17 per cent in just four weeks.

And although the National Livestock Reporting Services reported gains of $2-$4 a head for heavyweight trade lambs at Bendigo on Monday, Bendigo's heavyweight trade lambs were being quoted at 360-370c/kg carcass.

Meat and Livestock Australia attributes the sharp falls to an over-supply of lighter lambs and a lack of demand from restockers.

According to NLRS, demand from restockers and feeders accounted for only 13 per cent of the September auction yardings.

And, although this rate was higher than the 9 per cent for September last year, it has done little to take the pressure off meatworks which slaughtered 1.3 million head for the month, which is 22 per cent above the August tally.

At Jerilderie, NSW, last week, buyers showed subdued interest in the big offering of 9500 Merino lambs.

Only four weeks ago processors dominated the bidding at Jerilderie, paying $30 to $48 for lambs with condition.

But last week they weren't interested.

The drop in the lamb prices has been a disappointment for producers who have yet to take advantages of any rise in export returns resulting from the weakening Australian dollar.

Producers may also be disillusioned by forward contract rates.

Major lamb processor Tatiara Meat Company, which is based at Bordertown, in South Australia, this week confirmed that it now has forward contracts available.

The Tatiara contracts are for lambs weighing 20-24 kilograms, until November, of 340c/kg.

Although the certainty of this price may attract some producers, others may be more inclined to hold out.

High grain prices have been blamed for sheep numbers continuing to fall, with export processors beginning to worry about the longer-term supply of lambs, particularly for next winter's supply.

This situation prompted a recent comment from Castricum Brothers director Theo Castricum that Australia risks returning to being just a seasonal producer of lambs.