UPDATE: LAMB prices rebounded slightly at Hamilton today but are still lagging well behind a year ago.
The market of 42,000 lambs was buoyed by strong restocker interest and additional processing bidding, which forced rates up by as much as $8 for heavy lambs and $3 for trade lambs.
But prices are languishing below 350c/kg, compared to the 480-490c/kg paid at the same time last year.
National Livestock Reporting Service's Erich Gstrein said the market had stronger bidding today, thanks to more buyers.
He said the quality of the offering was also better, helping to boost rates.
Trade lambs sold from 255-330c/kg and heavy lambs made from 280-325c/kg.
And while the rates are better, they are still below what producers were hoping to achieve at the start of the lamb selling season.
Earlier today Weekly Times Now reported in the past week, rates for lambs have dropped by up to $15 at key selling centres at Bendigo and Wagga Wagga.
However, the dry finish to spring and a lack of confidence has forced producers to offload stock.
Rodwells Benalla manager John Gregory described the lamb market as "bloody terrible".
"It's as tough as I have seen it for 10 years," Mr Gregory said.
"Producers are devastated. I don't know what to advise my clients, or to tell them, or what to do.
"Budgets were set at $95-$100, and to get $75-$80 will have bank managers scratching their heads."
Lamb yardings nationally were up 38 per cent last week, and prices dropped dramatically.
All key lamb indicators in the eastern states closed lower on Monday, and have dropped by up to 43c/kg in the past week.
Lambs were trading between 480-490c/kg this time last year, compared to Monday where rates were 301-326c/kg.
Meat and Livestock Australia sheepmeat analyst Robert Barker said an extra 1.5 million lambs were killed this year, compared to this time last year.
"There has been a significant increase in supply pressure," Mr Barker said.
"While exports have been leaving Australia at a very fast rate, this is due more to the fact there is more lamb available at cheaper prices, rather than to a sudden improvement in overseas demand."
Mr Barker said current prices were "not at levels producers would really be chasing".
"Fortunately lamb is still being traded strongly, but at the moment, this is supporting prices more than really pushing them up."
But there is hope the industry may have seen the worst.
Mr Barker said prices were traditionally at their lowest in November, and over the past few years had risen in December.
"With the national kill so far above the same period last year, we may not see the same jump in yardings during December that occurred last year," he said.
Young lambs averaged 299c/kg at Wagga Wagga last week, the lowest seen since November 2007.
And at Bendigo on Monday, a bigger market of 21,000 young lambs averaged just 280c/kg. Prices fell by as much as $15.
Hamilton is about to start its big run of spring lambs, and producers and agents are nervous.
Kerr and Co Livestock livestock manager Craig Pertzel from Hamilton said today's market would see up to 40,000 lambs yarded, despite the falling rates.
"Producers are not overly thrilled over what is going on, but what can they do?
"Generally they are going to take the money."
Mr Pertzel said a surge of numbers, which will see Hamilton split its lamb sales over two days from next week, would continue for the next four weeks.
"We all knew it wouldn't be like last year or the year before, but thought it would be around 350-400c/kg," he said.
"Rates like last week, of about 300c/kg, are a pretty hard pill to swallow."
Further north, many producers are thankful they have largely finished selling suckers.
Vasey lamb producer Rick Hill sent lambs direct to a processor this week, signing up for a deal worth 330c/kg.
This was after his lambs sold in Hamilton yards last week for about 270c/kg.
"We've only just started selling lambs and it's all very disappointing," he said.
The first draft of lambs from the Hills' farm averaged $93 this year, a huge discount on the $157 of last year.
Mr Hill knocked back a 360c/kg offer a few weeks ago thinking "no one will sign up at that".
Those lucky enough with deals direct to works are receiving slightly more, but queues of up to four weeks at processors are pushing tens of thousands of lambs into markets.
Mr Gregory said producers would opt to sell direct, but procesors were booked up to four weeks in advance.
"Even then, you book in lambs but don't find out until the week before what you will get paid," he said.
Mr Gregory said some processors were allowing producers to book lambs in, but would only tell them what they would be paid a week before the delivery date.