Slight sentiment improvement for lamb but $1 mutton continues to disappoint

But increased yardings due to the spring flush could cause more price dips in the near future.

All indicators have made positive price movements over the past four weeks, albeit only incrementally for mutton.

The best gains in the past four weeks have been for light lamb, up 104c to 407c; Merino lamb, up 109c to 331c and restocker lamb, up 106c to 399c.

Mutton is only up about 7c from four weeks ago, and 1.5c from a week ago to 107c.

All indicators remain between $2.80 to $3.80 cheaper than a year ago.

Yardings were up over the past week for heavy and light lamb, but down in all other categories.

Mecardo analyst Angus Brown said the price improvements were due to a combination of better quality as new season lamb come through, improved exports to the Middle East and China and increased processor capacity.

"It bottomed out at under $4.50 and now that trade lamb indicator is closer to $5," he said.

"The spring flush will be the next test, Bendigo had a big yarding on Monday and Wagga had over 60,000 on Thursday so those lambs are starting to come.

"Then you'll get Ballarat and Hamilton having some very big yardings over the next month or so, which will test the market.

"Having said that, there hasn't been a lot of forward contracts out there so the buyers are then going hand to mouth which might mean that demand at the yards is ok."

Mr Brown said it was possible that a waning supply of sucker lambs from NSW could help offset increasing numbers out of Victoria and South Australia.

"Mutton is the depressing one and it doesn't even look like it's got a lot of impetus to move higher until the supply really backs off and it's hard to know when that's going to be," he said.

Nutrien south east region livestock lead Adam Mountjoy said recent Bendigo sales had seen price improvements for better quality and heavier lambs.

"Let's hope the trend can continue for the better presented lambs as we get into the heightened spring numbers, which are about to come forward in the later part of October and November," he said.

"I think the only way is up to be honest, and I think the quality lambs will continue to see increased demand."

Mr Mountjoy said mutton however was still finding it a challenge to receive any kind of price increase with subdued demand.

"If we can clear mutton at the rates we're achieving now and can go back and put increased genetics and youth back into flocks around the countryside at limited changeover, it's all relative.

"I think it's a wonderful opportunity to step back into some younger sheep and maybe even higher quality sheep while the prices are depressed and get ready for 2024."