Hilton Barrett offers to take on sheep for free as an alternative offload option for producers in a tight spot

Among them is Dubbo shearer and sheep producer Hilton Barrett, who has the sheep industry talking this week with a post on social media saying he could take as many as 50,000 sheep, starting in three to four weeks.

He made the offer on the basis he would only pay for transport for a set distance (150 kilometres), and take the sheep at no cost, to provide another option for producers looking to offload stock at minimal cost.

As a shearer, he was also concerned about future ewe numbers, should the season and prices continue their downhill slide.

The question among agents and analysts is "will he get any sheep?".

For producers looking at their options, there could be plenty of potential upside in sheep, especially for those who had feed or can handle wool.

There was also opportunity beyond the next six to 12 months for red meat exports, given the potential positive global meat price upside and supply chain dynamics.

One thing they agreed on: This was just another option, should producers find themselves in a position where it was costing them to send sheep to slaughter or sale.

Mr Barrett runs 2590 hectares across three farms at Brocklehurst near Dubbo, Eumungerie and Gilgandra.

At the break of the drought in 2020 he was among those who imported sheep from Western Australia, buying 5000 head to restock, of which 700 remain.

Like many, he has been offloading sheep - "and everybody knows I've been copping a flogging", he said.

He has also installed automated The Shepherd feeding systems that will allow him to cut labour costs while maintaining a maintenance ration to any sheep he does retain, or takes on.

The intriguing message he posted on social media last week when he put the call out to followers was: "Hi all, willing to take the first 50,000 free sheep. I will only pay for the transport up to 150 kilometres. This week only!"

The post got mixed reactions, including a question asking: "Are there people actually giving sheep away already? l haven't heard of it but must be getting close".

Mr Barrett predicted the next six weeks would force some hard decisions, should there be no decent rain across the state's north.

He said draw a line through the state south of Dubbo and Mudgee, and anywhere above that line was getting "very dry very fast".

In another post, Mr Barrett said it was "cheaper to give them (the sheep) to me than to send them to the saleyards".

For lighter condition cull and cast-for-age ewes and light Merino wether lambs this was potentially the case, with lighter, plain quality Merino lambs in Dubbo on Monday selling in the $5-$25 a head range, and the absolute lightest, poorest quality Merino wether lambs selling for as little as $1/head, said Delta Pollard Livestock agent, Tom Pollard.

He said in his mere nine years as an agent he never thought he'd witness a downturn this severe.

However, he said anybody prepared to take those lambs through to a properly finished article were being favoured by processors.

Some processors were offering $5.40-$5.60 a kilogram for better quality new season lambs, however, over-the-hooks old lamb prices had taken a hit, down in the $4-$5 range, putting grain feeding outside the budget of many finishers.

This included Dave Berrell between Collarenebri and Walgett, on "Midgery", who runs about 4000 Dohne ewes, including 350 stud ewes, plus a sheep feedlot.

He only planted 243ha of his usual 1619ha crop area this year and has just put his stud ewes on his "two-inch high" barley crop to graze.

"We've got a cash flow problem now," he said, explaining he would normally have higher value surplus ewes and wethers to sell through this period, however they had dropped in value as much as 80pc.

"I'm not going to give them away."

He had grain to feed his sheep for 12 months.

To start finishing lambs in his feedlot, he would need to see a grid price of $5-$5.60/kg to have a decent enough margin on a $20-$30 lamb, saying it would cost him $50-$60/head to finish.

And this was with out-of-spec grain he grew on farm, not bought-in feed.

It was a similar scenario in western Victoria, where farmer and lotfeeder, Tom Bourchier, Horsham, has built a new lamb feedlot.

In response to Mr Barrett's social media post, Mr Bourchier indicated he might be able to take as many as 20,000 lambs, pending the price.

He would ideally like to see the grid price get into the mid to high $5/kg range.

His feedlot was set up to buy the grain from his cropping business at market value.

Nutrien agency, market and product specialst and market analyst for Mecardo, Robert Herrmann, agreed lighter condition stock were struggling to find a home.

But said there were options, including for buyers.

"I'd be encouraging people to look at some of the big runs of Merino wethers that will be coming out of places like the Riverina," he said.

He said in today's wool market those wethers, as well as ewes, were going to comfortably cut $40-$50 of wool next shearing.

With this sort of opportunity in mind Bowyer and Livermore agents from Bathurst were in WA last week to take delivery of 6500 Merino ewes on behalf of a NSW Central West client.

Agent, Todd Clements, said the low prices presented an opportunity for producers to upgrade genetics at very low changeover cost.

Additionally, the long term global outlook for meat - sheep and beef - remained positive.

Mr Herrmann said the 90CL US cow price was a good general indicator of global protein demand and while the Eastern Young Cattle Indicator was down, the 90CL price had remained relatively strong, at US239c/lb last Friday.

In 2022 the EYCI was 200c/kg higher than 90CL, but was now 200c below, which Mr Herrmann said indicated the problem was with our capacity to deal with numbers here at a domestic processing level.

The issue was mirrored in mutton, but due to China's pork production being back to pre-African swine fever levels, export demand for mutton was hit harder.

"The national mutton indicator is down 74pc (year-on-year)," Mr Herrmann said.

This price collapse, plus concern around the season and memories of the 2019 drought, constituted the main emerging risks.

"That's why El Nino is such a critical factor right now," he said.

As Wellington agent, Ross Plasto, director at Plasto and Company, said, in real terms, saleyard prices were as bad as the early 1990s.

"It's the old season stock and mutton. It took a very good sheep to make over $40 in Dubbo," he said, of Monday's sale.

Mr Herrmann agreed, but only for certain categories, such as the lighter condition cast-for-age Merino ewes and Merino wether lambs.

However, new season lambs, "if done right", were still making $4.50-$5/kg.

Also, the lower half of NSW, plus Victoria and South Australia, were still in a good season.

There were questions around China's shaky economy and what that might mean for wool, but countering this was emerging demand in India and the UK for better quality wools on the back of recent free trade agreements.

"While China's steadying, nobody's suggesting they'll take less (wool)," Mr Herrmann said.

He said light Merino lambs at $5-$10/ head could therefore be good buying.

As for Mr Barrett, it was generally thought his offer could be an option some would take up.

Concerned also about the future of the shearing and wool industries, he said "some of us need to hold onto breeders - at what cost that is, I don't know".