TFI forward contracts in demand

The company recently released forward contracts for the late spring-summer delivery period and by the cut off four business days later, it had 200,000 lambs forward-contracted for its Murray Bridge and Lobethal abattoirs.

The contracts were for 16 kilogram to 34kg carcaseweight, 2-5 fat score lambs.

Prices ranged from $5.20/kg for crossbred lambs and $4.90/kg for Merinos delivered from November 2 to December 11 up to $5.45/kg for crossbreds and $5.15/kg for Merinos for late December to mid-January delivery.

TFI national livestock manager Paul Leonard was pleased the contracts had been "well accepted" and said while they had previously issued numerous contracts for the shorter-supply winter periods the latest contracts were consistent with its commitment to rolling forward prices.

"The feedback from a lot of growers and agents was they wanted more consistent pricing so we have tried to accommodate this in what we are doing," he said.

"We will open up more contracts again later in the year for the new year but we are trying to take out the extreme highs and low lows."

Mr Leonard acknowledged it had been a balancing act to spread the lambs equally over the weeks, and thanked all those involved in the process.

"We have tried to accommodate everyone and while we were aiming for 50 per cent (of our throughput) some weeks it has been closer to 70pc. We have a policy of supporting markets every week, and our clients who support us, so we couldn't contract everything," he said.

Mr Leonard said nobody could be sure where the physical market would be in summer but they had tried to offer a "fair and reasonable" price to producers.

"Historically, anything with a $5/kg in front of it for November and December is very good money. It is guaranteed kill space and guaranteed money," he said.