PREVIOUS industry predictions of a flood of lambs arriving in SA saleyards early next year might not eventuate, after many producers took a punt on forward contracts and exercised caution in the store lamb market.
But this could mean prices in the new year are expected to pitch above present returns.
Lamb yardings at saleyards took a dive at many of the states final sales for the year according to livestock agents, but whether or not that will translate into larger numbers arriving in the new year, is still anyone's guess.
Market prices are therefore set to reenter uncharted territory next year says BM Livestock's Brian Schiller, Eudunda.
"A lot of people have held off selling lambs until the new year because they have feed available and prices should be higher, but it is difficult to know how many have taken this position," he said.
The on-hook price is about $7.20 a kilogram with a potential to rise by 80 cents/kg by February/March.
Mr Schiller said producers that elected to hold onto their own lambs for longer to sell in the new year, instead of selling in the peak period and buying in store lambs at high prices, would benefit.
"There would most likely be no gain in doing that. But it is still unknown if there will be more lambs at the start of the year and less lambs a bit later because store lambs were all bought by the processors instead of graziers, not wanting to take the risk," he said.
SA Livestock Exchange auctioneer Glenn Keast said bucket loads of lambs that were sold earlier in the season at 18 to 24 kilograms, were historically retained until later and into the new year at heavier weights.
"Many of the lambs that are generally sold in January/February have already been slaughtered - so there could be limited numbers available but higher prices in the new year as a result," he said.
"Originally we thought there would be lambs everywhere at the start of next year but now, after looking at the amount of lambs slaughtered and no one buying in stores to grow out, it could be the opposite."
SA producers that signed on the dotted line for forward contacts for $6.40/kg very early in the season will also impact market prices in the new year.
"A lot of people signed those contracts. It might not be for all of their lambs but its for a portion," Mr Keast said.
"Some are not happy considering that prices are expected to be a fair bit higher in the new year - so we will see less lambs coming onto the market because of that," he said.
"It is quite a few more than usual - it might be a gamble, but the entire season has been like that."
- Noel Jaeschke, Clare.
Producers could also run into trouble with penalty rates associated with the forward contracts, Mr Keast says.
"Lambs will most likely be heavier because some have held onto them for longer and for 30 to 34kg lambs its $5.40/kg and even less for 34kg plus," he said.
Clare mixed-farmer Noel Jaeschke will however hold over more lambs than usual to sell in the new year.
Mr Jaeschke was one of many producers who sold early but also secured a forward contract for lambs that were generally sold though the saleyard or over the hook in January and February.
"I sell-off the tops weekly from about August until the new year," he said.
"But I did sell more earlier because of the uncertainty caused by Covid-19."
But Mr Jaeschke said in an attempt to make up potential losses from signing a forward contract at significantly less than potential lamb prices in the new year, he had held onto more lambs.
"It is quite a few more than usual - it might be a gamble, but the entire season has been like that," he said.
But if the many shakeups throughout the season were not enough to cause market uncertainty, an influx of an estimated two million sheep and lambs from Western Australia arriving across the border since March, could "throw a spanner in the works", according to Elders Dublin/Kadina livestock manager Matt Ward.
"The poor season in WA has meant a massive sell-off of sheep into SA. But what is unknown is if it is lambs or ewes," he said.
"I suspect it will be about half of each and that means we could see a lot of lambs coming onto the market in the new year."
Prices early next year could therefore do anything, Mr Ward says.
"If a heap of lambs from WA end up in the market, prices will reflect that," he said.
"The world is unsure and producers are just reflecting that uncertainty in their selling behaviour."
But despite this, Mr Ward said producers in the far north of the state, had limited lambs on feed ready for the new year.
"They just do not have the feed still and store lamb prices stopped a lot of those producers from buying in," he said.
"People are playing Russian roulette with the market. Some sold, some held on and some bought in, in a hope prices would be much higher in the new year."
The South East's lamb supply is however expected to remain similar to past seasons according to Pinkerton Palm Hamlyn & Steen Naracoorte Richard Harvie, with local producers opting to buy in store lambs despite the high prices.
"They have the feed so the same amount of lambs will be pumped out of the SE," he said.
But, a bumper season in NSW is expected to cause a potential lamb oversupply in March and result in a softening of prices.
"There will be a lot of lambs in the system," he said.
More than 50,000 sheep have also arrived from WA into the area but Mr Harvie said that impact would be felt in the 2021 spring lamb season.
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