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2 October 2020 - FROM THE ARCHIVES

Strong opportunities for producers despite global impact on markets

This week, we're going to provide a broader picture of livestock markets with a focus on the effect of global and domestic trends, and the questions these pose.

As the economic outlook around the world sits on a knife edge as a result of COVID‑19, the Australian sheep market continues to be directly impacted.

The export market in particular has felt the full impact of the pandemic.

Big lamb markets in the US have been decimated by the virus, seeing vast closures predominantly in the food service sector.

These external factors will play a decisive role in when producers decide to sell and with the domestic market becoming their main viable option, supply could also be a constraint depending on volume of stock offered in the lighter category.

What is clear is there will be lambs to sell, but at what stage is what needs to be weighed up.

So ‑ to sell or not to sell?

When making this decision, farmers will analyse the costs of retaining lambs or turning them off earlier.

And as discussed, there is an abundance of selling opportunities producers are exposed to when turning off lighter lambs therefore being a viable option in the current market.

We are seeing trade prices hold up well in the $6.50 ‑ $7 range, while lighter lambs exceed these prices on a c/kg basis.

Confidence in the cattle market continues to strengthen due to the ongoing competition between restockers and processors, evident across the store market, driving prices upwards and holding them there.

Cows and calves are in high demand, as prices for breeders remains strong with the herd rebuild in the Eastern states.

All classes of young cattle continue a strong market trend, with prices across most categories making north of 400c/kg LW.

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