Increased yardings are putting downward pressure on trade lamb prices, but the market remains strong compared to last year's pre-Christmas prices.
At the close of trade on Monday, the trade lamb national indicator had fallen 26c from last week to 835c, still up 82c from a year ago.
Heavy lamb lost 10c to sit at 865c, while restocker lamb dropped 2c to 955c.
Meanwhile light lamb gained 38c to sit at 902c and Merino lamb was up 25c to 757c, while mutton gained 20c to 634c.
According to Meat & Livestock Australia, mutton prices have surged 15 per cent since November 5, from 549c/kg to 630c/kg, as lower supply takes an effect on pricing.
In the last two weeks, wethers have made up an increasing percentage of the mutton yardings, receiving a 2c/kg premium over ewes.
The price rise comes despite national mutton yardings increasing 30pc in the space of a fortnight, signaling strong demand from both restockers and processors.
Meanwhile, bigger lamb yardings have been pushing prices down in the heavy, trade and light lamb categories.
For trade lamb, prices peaked at 862c on November 17 during the month's rally, but since then have eased by 3pc as yardings increased 20pc.
Elders Bendigo livestock manager Nigel Starick said the drop in trade lamb prices was no surprise, given the larger numbers coming through saleyards.
"It's just that time of year when the numbers are coming and because they're coming so late, they're all coming together so it had to have an effect on that indicator at some point," he said.
"There's still plenty of the abattoirs quoting $8 to $8.40 a kilogram on the trade weight lambs or even 20 to 30kg lambs so it's still a very good rate at the moment considering where we are, this late into the season four weeks away from Christmas."
Mr Starick said prices would potentially slip further over the coming weeks, due to sheer supply.
"Hamilton's really only just starting to get going and Ballarat's just starting to get going so there will be a massive number of lambs go through there before Christmas," he said.
"You'll see 60,000 I would have thought for a couple of weeks in Hamilton on a Wednesday, plus their 20,000 on a Monday ... 40,000 or 50,000 out of Ballarat and you'll still do 20,000 out of Bendigo at the moment so there will be some big numbers come out of Victoria over the next three weeks.
"You talk big numbers but when you look at the percentage break down there's a lot of store lambs at the moment and not so many trade and export lambs."
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