Analysis: Merinos going missing in the saleyards

There has been a huge trend away from selling Merinos in the saleyards this season, and prices have disappeared with them.

It has been a challenging year for Merino lamb producers, and the market could face ongoing pressure into winter, with saleyard data suggesting a backlog of numbers still in the supply chain.

Across the sheep industry, Merino lambs seem to have been the most affected by the wet weather and flooding that hit in the spring.

Significant death rates were recorded across the pastoral area, and the lambs that did get through appear to have been compromised in terms of doing ability and capacity to gain weight and fatten.

It has been difficult to fatten Merino lambs this season and it means they are later into the prime market.

Merino lambs have also been at the forefront of the grass-seed issue, with prolific spear-grass and corkscrew growth in native country putting buyers on edge in regards to stock from station country in NSW and South Australia, where big volumes of Merinos are bred.

In the words of one auctioneer, they have “been belted’’ at auction, with the average saleyard Merino price back 200c/kg carcass weight on year-ago levels compared to heavy crossbred lambs, which are 70c/kg carcass weight shy of last April’s price point.

All these production and price issues have disrupted the usual supply patterns for Merino lambs, which are now showing up in hard data.

Source: Included

The graph on this page shows the supply of Merino lambs sold at weekly prime markets monitored by the National Livestock Reporting Service, with the numbers displayed on a month-by-month basis.

Since September last year, the number of Merino lambs at saleyards has been tracking lower than in the past five years. It culminated in just 13,310 Merino lambs being counted at NLRS markets in April, back 50 per cent on the same month in 2022 and well shy of the 79,000 plus that were auctioned in April 2021.

The latest numbers in the rolling National Merino lamb price indicator had just 5,882 lambs at an average of $108, working out to 495c/kg carcass weight, according to Meat and Livestock Australia.

Exactly a year ago, this price indicator had a count of 10,652 Merino lambs that had sold for an average of $151 at 704c/kg carcass weight.

The drop off in Merino lamb numbers at prime markets has been significant in the past six months, with the very low April yarding figure the most surprising as many Merinos, being late drop lambs, are born June, July and August – the peak selling times are late autumn and into winter (see graph again).

On the surface, these low saleyard figures indicate there could be a significant backlog of Merino lambs still to be sold. And that scenario can’t be ruled out.

However, factors such as the number of Merino lambs being sold directly over-the-hooks and online such as AuctionsPlus, need to be considered.

Lamb kill figures don’t differentiate by breed. On a positive the national lamb slaughter has been trending above year-ago levels, reaching 427,000 in late April in one of the biggest production weeks for some time. It is just impossible to know what component of Merinos was in this overall lamb kill.

Several agents told The Weekly Times more Merino lambs had been sold direct to processors this year due to vendors favouring a known price outcome and to avoid the auction system, which has been treating Merino lambs harshly.

Some agents suggested the ‘grass-seed’ saga had taken a heavy toll on demand and the price

performance for Merino lambs in recent months, with buyers generally backing off the breed.

However, the subdued results could also be linked to the fact Merino lambs haven’t been presenting well in regard to carcass weight and fat cover, and plainer kill lambs have faced the toughest outcomes at prime markets this season.

On Monday at Bendigo, agents said they had hooked Merino lambs in the past week that had

returned more than $200, well ahead of the best results seen at most saleyards recently.

However, while there is debate about the size of the backlog of Merino lambs heading into winter, the consensus is the traditional sell-off has been disrupted, and more numbers than usual are still sitting out there.

There are plenty of Merino lambs expected to come into the market this winter as a wet spring delayed turnoff.

Evidence of this can be seen in the listings for this week’s store sheep sale to be held at Deniliquin in southern NSW on Friday. Agents have advertised 21,000 sheep, and of this number, more than 13,000 are Merino wether lambs.

Selling agents said some of the big drafts of Merino lambs in this sale – including 7000 off one local station – had been delayed due to floodwaters preventing them from being handled and prepared for sale in the spring.

Riverina agent Bill O’Brien, Nutrien Deniliquin, said Merino lamb breeders had faced several

production hurdles this season and bigger than usual volumes of stock were still to be sold.

“A lot of Merino lambs have been hooked, but there is still more out there than there would normally be at this time of the year,’’ he said.

“Getting them up to weight and right to sell has been difficult.’’

While Merino lamb supply is likely to be greater in coming months, agents said quality would

generally be below the standard of other winters and processors expecting numbers with weight and good carcass finish could be disappointed.

Elders agent Jason Andrews, Deniliquin, predicted there could be quantity but not quality in the Merino lamb run this winter:
“There might be a hit of Merino lambs (in June and July), but there won’t be many good ones.’’