Record prices on the cards for first-cross ewes
All eyes and wallets will be on lead pens of ewes at the southern crossbred sales, which kick off in Corowa later this month.
FACT: Young Merino ewes sold to $382 and averaged $330 a head at Jerilderie in NSW last week in what was arguably the strongest special Merino sale ever held in the Riverina.
FACT: The price results show how the boom season and shortage of stock has brought the traditional “rule” back into play of a good sucker lamb and an old cull ewe now being needed to fund a quality replacement ewe.
PREDICTION: The stage is now set for the lead pens of first-cross ewes to make more than $400 a head at the feature southern crossbred sales, which start at Corowa later this month before moving to Bendigo and Naracoorte, in South Australia.
Bidding at the Jerilderie sale went to another level last Friday, easily surpassing the Hay sale, which has often set the benchmark high price for Merino ewes in the spring selling season.
Coming into play at Jerilderie was the rarity of rising lamb and mutton prices in October, the confirmation of a La Nina weather event that has farmers confident of the boom season carrying on, and more southern buying demand.
Selling agent Nick Gray, Elders Jerilderie, said the young, 2019-drop Merino ewes consistently sold at more than $300 to create a dearer than expected result.
“It was $20 to $30 per head above my expectations,’’ he said.
“There was competition from areas that we normally don’t see at Jerilderie, like Ballarat and East Gippsland.’’
The official figures from Jerilderie for the main classes of sheep were;
A TOP of $382 and an average of $329.69 for 5390 young 2019- drop Merino ewes, which were all recently shorn.
A TOP of $262 and an average of $224.56 for the 2855 genuine five-year-old Merino ewes sold, continuing the trend of proven breeders selling exceptionally well and well above ruling meat value.
The Weekly Times has used the Jerilderie sale to give producers a snapshot of how the store market is travelling compared with ruling meat and wool returns, dating back more than 15 years to show the trend.
The table gives the update for this year, and it shows how the market has shifted from being in favour of buyers to a lineball on current average auction returns for lamb, mutton and wool.
The comparisons are based on saleyard indicators.
The lamb price is calculated on a 22kg sucker; the ewe price on a 26kg body, and wool on a ewe cutting 7kg greasy and worked out on the ruling Eastern Market Indicator.
The top price at Jerilderie last week was $382.
The current return for a lamb, cull ewe and wool amounts to $384, meaning a year’s income is roughly needed to cover the cost of the lead runs of ewes.
This is a notable difference to recent seasons, when farmers have been able to buy young ewes for well below income generating levels.
For example last year the top young Merino ewe price was $285, against a lamb, ewe and wool income of $382.
Such a big difference in favour of buyers was generated by the drought, which restricted farmers from replacing ewes.
On paper, this year is one of the few in the past 15 years where the income generated from sheepmeat sales has basically been swallowed up by the cost of the top young ewes.
However, it needs to be noted that farmers are benefiting from more weight in sucker lambs and ewes this year.
In reality, most lambs from the top producers (and let’s be honest, if you are paying $350 plus for ewes you are well established in the game) are going out above 24kg cwt, and ewes more like 30kg-plus.
So using Bendigo from this week as an example, a good heavy trade lamb was closer to $210 and heavy Merino ewes $190, which pushes returns well above $400 and creates a more comfortable trading margin than possibly shows up in the table.
First-cross ewe breeder Andy Hay, who is preparing to sell 600 first-cross ewes and lambs at next month’s big Bendigo crossbred sales, paid $340 for Merino ewes at Jerilderie.
He said the price was in the ballpark using the old calculating system of an old cull ewe and a sucker lamb being used to fund a replacement breeder.
“Good old ewes are making close to $200 and now the sucker market has improved you can get $200 for young lambs.’’ he said.
And that segues into the price prediction of $400-plus for the best 1½-year-old first-cross ewes.
For the first time, The Weekly Times has put the top price for the Emu Park first-cross ewes — bred and sold by Bill Bott and family at Corowa each year — against the Jerilderie figures.
In the past three years the Emu Park ewes have made between $40 and $62 a head more than the top Merino price at Jerilderie.
To play this scenario out, an extra $40 on $382 takes the first-cross price to $402.
At $62 more, the crossbred price would work out at $442.
Going back to the lamb and cull ewe formula as a ballpark to fund a replacement ewe, and the $440 price is achievable, at least in theory.
The best sucker lambs made $259 at Bendigo this week, and the biggest crossbred ewes $200 to $230. This gives a combined income of $460 plus.
However, there is no distinct pattern long-term for Merino versus crossbred ewe price, using Jerilderie and Corowa as the benchmark.
But with the season booming, and if lamb and mutton can escape its traditional price correction, the first-cross ewe sales look set to break records, just like Jerilderie last week.
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