Unseen territory predicted ahead for sheep market industry

These comments came off the back of a pen of 154 extra heavy White Suffolk/Merino lambs selling for $300.60 a head at Forbes prime market on Tuesday – yet another new national record. 

The records are tumbling before a weeks turn around – only last Thursday lambs sold to $297.60 at Wagga Wagga.

At the time of writing, MLA’s trade lamb indicator had surged to 791 cents per kilogram and heavy lambs 843c/kilogram 

But with these shock and aw prices, a few trends of concern are appearing, one being where restockers are going to source their stock from and at what price. 

Isaac Hill, Livestock agent G.J Hulm and Co. Wagga Wagga, NSW, said he has never seen a sheep market like it and predicts we will see first-cross ewes at prices well above previous years.

“Season depending, I think there is going to have to be a push north of the prices than what we have traditionally seen,” Mr Hill said.

“A lot of the areas are in devastating drought and people have already sold off their ewes as lambs. There is going to be a limited number available.”

Mr Hill said it’s ‘economics 101’ and it’s all about the right choice for the producer right now.

“Right now the choice is to sell them as ewes at $200, but they have nobody to buy them, or sell them as prime lambs for $200 and they have got an infinite number of people to buy them,” he said.

He said by September/October, if the season breaks, when the traditional first-cross ewe buyers have to step back into the market, he fears there will be significantly less on offer.

It is then a matter of mathematics. 

“With the mutton market making $170 plus for a cast-for age-ewe and $200 plus for decent suckers people will have to draw a conclusion of what is viable and what is not viable - that will be your price point,” Mr Hill said.

Traditionally Mr Hill buys his sheep in from Narrandera, Temora and further north but this year, going further north than that (Walgett, Coonamble, Gilgandra and Warren) they are all doing it incredibly tough.

“Farmers are not willing to hold them,” he said.

“By the same token I’m trying to find people that will buy them down here that will then have to buy feed for them and they are not willing to.”

Mr Hill said as a stock and station agent it is the most unpredictable situation that he can remember.

“Looking forward, you can say right here and now, the prices are good for lambs, bad for cattle, but what will next year bring?” he said.

“I have not a single clue with what we are going to be faced with.

“Traditionally what happens is general rains come, and droughts break. But the limited stock producers have, they are going to hang on to them and breed their numbers back up.

“They have to do it if they are going to stay in farming.”

Mr Hill said processors will be the ones to dictate where the market goes in the short-term.

In Victoria, with the season just hanging on, livestock manager of Elders Bendigo, Nigel Starick, said he expects numbers to be much the same as last year with not a great lot of first-cross ewes sold off any earlier in the central  and southern parts of the state. 

“Our numbers at this stage seem to be okay, but we are still only day-by-day because if we don’t get another good rain who knows what is going to happen in the next 10 days ,” he said. 

“People might decide they have to sell because feed is short.”  

He said it is the most unusual sheep market he has ever seen, describing the prices as “phenomenal”. 

“We are experiencing record numbers for their winter periods because people are selling because prices are so high,” he said. 

“Not necessarily because of the dry, that’s a factor, but why wouldn’t you sell while the job is so good.” 

Mr Starick anticipates their first-cross ewes prices to be similar if not better than last year, but the major concern is where numbers will come from next year.   

“We don’t know if anybody is going to want to pay more than they did last year because they were record prices then,” he said. 

“But next year there may not be many sheep around – either by not being born or having lambing and weaning percentages way down.”

In Hay, NSW, agents are conducting their annual Merino sheep sales, normally held in October/November, in August/September. 

The decision to sell early is due to the desperate season.  

“They have already sold a lot of Merino sheep up there so I don’t know where we are going to get them from next year,” Mr Starick said.  

Matt Ward, Elders livestock manager Yorke Peninsula, SA, said in Jamestown the scheduled sheep sale in July was cancelled due to lack of numbers. 

He said in the last three to four months he has seen typical sellers of their young ewe hoggets already sell them off as ewe lambs. 

“I’d say there would be 15 per cent of people who have opted to sell their ewes as lambs rather than carry them through to September/October as hoggets,” Mr Ward said.

“These people supply sheep from the west coast of South Australia, the mid north of SA and as far down as the the Murray Bridge.”

He said in SA if you go north of Loxton the season is “terrible”. 

But Mr Ward has a different opinion on the prices restockers may be looking at paying come spring.

“Our sheep numbers in SA are depleted as it is,” he said.

“I can understand in NSW and southern Queensland the season has been bad, but here cropping in SA, as a rule, has been king for probably 20 years.

“There are quite a few farmers that have large cropping operations and only a few sheep.” 

He said in SA, he can see young ewe prices, if producers can get their sheep up and looking ok, they could be $20 to $20 dearer compared to this time last year,.

“There are a lot of people out there that will pay $200 to $220 for a young ewe, but there is not too many that will be willing to pay $250 to $300,” Mr Ward said.