FARMERS will have to wear more risk after a major sheep processor this week ruled out forward contract deals.

T&R Pastoral, which operates abattoirs in South Australia and NSW and is a volume buyer of slaughter lambs, will not offer mass forward-contract price deals to farmers this season.

And the company livestock manager, Paul Leonard, suggested other exporters were unlikely to offer high-priced forward contracts to secure out-of-season lamb supplies after being caught with expensive lambs last autumn and winter.

"It hurt," he said of last year's mis-reading of market supplies, which led to record-price forward contracts at up to 640c/kg carcass weight. "There is going to be a bit more caution out there this year."

Mr Leonard said T&R would work directly with stock agents with clients interested in supplying kill lambs at certain times of the year, which he referred to as "one-on-one" pricing.

He said the company had recently signed such a deal for a January delivery of lambs to its Murray Bridge-based meatworks at 520c/kg carcass weight. Mr Leonard said one-on-one pricing gave the company more flexibility to tailor deals and cap numbers.

He said there were inherent problems in offering mass forward-contracts essentially based on guesswork and that farmers wouldn't take them up unless the price was well above current saleyard rates.

"What the forward-contract deals proved last year is that processors don't know, and no one really knows, what is happening out there in regards to supply," he said.

Mr Leonard said a system that had some merit was a base price for a forward contract, with a component of the deal then connected to the physical market through the Eastern States export lamb price indicator.

"Processors can't be expected to take all the risk and underwrite the entire lamb industry, there has to be some sharing of risk for forward contracts to work," Mr Leonard said.

Australia's largest processor, JBS Australia, declined to comment on whether it would offer forward contracts for lambs this summer.

JBS would not comment on speculation that its main livestock buyer, Steve Chapman, had left the company.