FARMERS have asserted some control over lamb prices by withholding stock from sale.
But such a fix must weaken later in the season as pressure mounts to quit lambs before teething and the onset of cropping and winter.
After price falls of up to $30 a head for heavy lambs last week, producers reacted by slashing lamb numbers going into the auction system.
National Livestock Reporting Service figures show a 28 per cent cut in lamb numbers sold at the major saleyards it monitors in Victoria, NSW and South Australia.
Victoria recorded the biggest fall in lamb supplies of 36 per cent, with numbers at markets such as Ballarat and Hamilton cut by almost half.
It appears to have had the desired effect of pulling the market back into shape, with prices at Wagga Wagga in southern NSW quoted as firm to slightly dearer late last week.
The category everyone is watching - the heavy export lambs - performed well at Wagga Wagga, with the NLRS reporting a price average of 473c/kg or $147.20 a head for fat-score four lambs that came in at 26-30kg carcass weight.
This result, and the fact it is still possible to book loads of heavy lambs direct into export abattoirs at still reasonable prices (of around 460-470c/kg), has most agents convinced the slump is connected to a temporary back-log of lambs.
NSW agent Jason Andrews, Elders Deniliquin, is one of the agents confident the lamb market will rally.
"Seasonal conditions turned tough in the south and that has resulted in a lot of lamb numbers coming through, and while there is a lot of uncertainty out there, I don't think we will see the market fall much more," Mr Andrews said after auctioneering at the Deniliquin store sheep sale last week.
The issue people are pointing to is spring's low lamb slaughter, due to the season running late.
Figures show that in the months of October and November there were about 300,000 fewer lambs killed compared with the same time the previous year.
The argument is that these lambs, which would normally have gone through the system before Christmas, have hit in January now that feed in the later finishing coastal and north-central areas has dried out.
It is an argument that has some merit.
The latest figures, for the week ending January 13, show an extra 40,000 lambs were processed at meatworks in Victoria and South Australia compared with the same week last year.
However, there is the issue that, on paper at least, a considerable pool of lambs is out there to be slaughtered this season and at some stage the market could come under supply pressure when farmers have fewer options for withholding stock.
When you look at the slaughter figures from last year, the busiest month was in August when 1.4 million lambs were processed, followed by April when 1.27 million were killed.
Once you get to August, lambs usually have to be sold due to age and teeth, while in April there is the onset of cropping and winter (and also teeth from autumn-born lambs) which often forces producers to quit stock.
Considering the good seasons and increased ewe flock numbers, there has to be at least as many lambs out there this season as last year. Which means at some stage there is going to be months when the lamb kill has to reach 1.3 million plus.
Some agents said last week March-April was a period they were concerned about, when they believed supply could out-pace demand.
