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Abstract
Previous research has found inconsistencies in the valuation of weight and fat characteristics of
lamb carcasses between the saleyard and wholesale markets. In this paper, recent New South
Wales saleyard and wholesale price data on different classes of lamb are analysed using hedonic
methods to determine the relative influence of weight and fat on prices received. Fat score 2
lambs are heavily discounted relative to fat score 3 lambs, and there are significant seasonal price
differentials, but there are no significant premiums or discounts for weight or other fat
characteristics. These results hold for both the saleyard and wholesale markets. The implication is
that the efficiency of price discovery in the Australian lamb market has improved a little in recent
years in the sense that premiums and discounts are now consistent across market levels. However
consumers’ stated preferences for large lean lambs are not being reflected in price incentives
generated in the live lamb and lamb carcass markets.