RISING lamb prices are driving a flood of new season lambs into Victorian saleyards and processors are getting edgy about winter supplies.
So edgy that major lamb processor Tatiara Meat Company, based at Bordertown in South Australia, is offering contracts of $4.50 a kilogram for lambs delivered July-August.
Lamb yardings are up 31 per cent on last week and 14 per cent above this time last year, according to Meat and Livestock Australia's National Livestock Reporting Service.
Despite this, saleyard prices reached record levels for this time of year, 23 per cent above the five-year average.
At NLRS recorded sales, heavy lambs averaged almost 400 cents per kilogram nationally and hit 406c/kg in NSW.
The sustained jump in prices - propelled by failed crops, the availability of stubble feeds and a diminishing national flock - have some processors worried about securing supply come next winter.
Export processor Theo Castricum was tightlipped when quizzed on the topic.
Supply was always a concern, he said, and Castricum Brothers had not settled on a forward price for winter.
TMC's Dale Cameron confirmed yesterday that his company was offering $4.40/kg contracts for lambs delivered in June and $4.50/kg for lambs delivered July-August.
South Australian livestock and feed consultant San Jolly said the high forward contract prices offered now probably reflected processors' anticipated tightening of supply.
"Pricing at this time of the year is unusually high - the temptation and profitability is there to offload as many lambs as possible and keep the stubbles to run ewes for joining," Ms Jolly said. "Processors have to put out hefty forward contracts for people to retain lambs and ensure supply."
But Ms Jolly said it was unlikely breeders would hold lambs over until winter next year.
"These prices will be more appealing to traders and not breeders, although there is a huge opportunity for autumn-lambers here," she said.
"The industry has been hanging out for all year-round forward contracts, but it appears this situation is in response to the higher prices paid now."
MLA chief market analyst Peter Weeks said a reduced lamb supply from fellow-exporter New Zealand, and a lower Australian dollar, would offset lower global demand and help maintain prices in the coming 12 months.
"We see prices being maintained above year-ago levels from now until next winter because supplies over that period are going to be a little tighter than last year, which is a reflection of drought in the south and national fall in flock numbers," Mr Weeks said.
He said forward prices of $4.40 were "most definitely sustainable" and lamb supply next winter would be better than the past year.
Meanwhile, NZ Federated Farmers Meat and Fibre chairman Bruce Wills said his country's lamb numbers of 27.3 million - 4.7 million or 15 per cent less than last spring - was a big worry.
