Andy Hay from Kamarooka shares Bendigo ewe prices

Livestock expert Jenny Kelly analyses a producer’s first-cross ewe prices over the past 20 years.

Andy Hay on his Kamarooka property near Bendigo. Picture: Dale Webster.

There is an element of deja vu in the crossbred ewe market, with more money changing hands but the basic trading rules staying the same.

While a new national price record of $516 was set for grown maiden ewes at Bendigo last week, the link between money being paid for replacement breeders to the income from lamb and mutton remains tightly linked.

Essentially the rule of thumb of the income from a prime lamb and cull ewe underpinning the value of a young ewe still exists.

Showing this is saleyard price figures from producer Andy Hay, Kamarooka, which go back 20 years and are detailed in the graphic below.

Or as Andy said, the prices reveal that “little has changed” from a trading perspective.

The table shows how the price difference between the money paid for the Hay’s young ewes to their lamb and mutton income has generally trended within a $40 band, sometimes favouring vendors and other times buyers.

Andy is a specialist first-cross ewe breeder and is one of the rare band of people who can claim to have sold young ewes for $500 this season.

The list shows the top price the Hay family have received for the annual draft of first-cross ewes sold at Bendigo, alongside the money they received that year for their first-cross wether lambs and cull Merino ewes (used to breed their crossbred stock).

The alignment of the figures is surprisingly consistent over a time period spanning two decades.

Or as Andy said, the prices reveal that “little has changed” from a trading perspective.

The table shows how the price difference between the money paid for the Hay’s young ewes to their lamb and mutton income has generally trended within a $40 band, sometimes favouring vendors and other times buyers.

For example, in 2017 the Hay ewes made $301 compared to a combined lamb/mutton value of $273, meaning there was $28 difference on the positive for the first-cross breeder. In 2009 the Hay’s ewes made $190 against a lamb/mutton value of $217, for a $27 difference to the buyer that year.

Andy Hay at the recent Bendigo sheep sale.

This year’s result was slightly exaggerated, with the Hay ewes at $500 and their wether lamb and ewe sale sitting at $414, for a difference of $86.

But there has been other anomalies. In 2007, which as part of the extended drought years and disrupted the supply of young ewes, the Hay crossbreds made $180 against a much smaller lamb/mutton income of $110.

Taking a broadbrush approach, the data in the Hay’s results support the argument of young ewe prices still being reasonable for producers with a solid trading history of producing good prime lambs and having heavy ewes to sell.

And let’s face it, it is only established lamb producers who are at the top of the game that are paying $450 to $516 for replacement breeders.

Pull it back to a more generic price level and the figures still play out.

The average price paid for 11,000 1½-year-old first-cross ewes sold at Bendigo was just over $400 a head. Using this figure as a yardstick, and dropping the sucker lamb income down to $190 and an old ewe to $170 (equalling $360) and it still works out to that ballpark of a $40 difference.

The Hay family’s figures also reveal some other interesting elements of what is driving the market.

The standout is mutton values. Since 2001, on the Hay’s price results, the price of mutton has increased 12-fold from $14 to $180 this spring.

The fact big heavy old ewes have consistently made more than $200 a head in the past two years is a significant reason why farmers have been able to come out and pay record money for replacement ewes.

The rally in lamb prices has also been a key ingredient, and has certainly played its part in the $500 ewe sales this season after carcass rates hit $10 in late winter and are still carrying an 800c/kg base heading towards Christmas.

From $46 for prime lambs in 2001 to $234 today, the Hay prices show a five-fold increase for lamb.

Apply the same formula to the young ewe price, and it shows an eight-fold increase from $64 to $500. It confirms the influence of lamb and mutton values to crossbred ewe pricing, the eight-fold increase fitting neatly between the five-times increase for lamb and 12-fold lift for mutton.

The other element of the first-cross ewe market which the Hay family’s data indirectly shows is the breeding history and production systems behind these record priced sales the industry is now celebrating.

There is decades of work behind these top sheep, and their reputation for quality and consistent performance is not acknowledged enough, particularly in the media which tends to focus on just the headline price.

The quality of the yarding at Bendigo last week was exceptional, particularly in the 1½-year-old ewes which showed tremendous weight for age and breed style.

Bill Bott, a specialist first-cross ewe breeder himself who sold ewes to $502 at Corowa in southern NSW last month, travelled down to watch the Bendigo sale and described the yarding as “faultless”.

“It is an incredible yarding of first-cross sheep, faultless really,” he said.

“The whole first-cross industry has really lifted its game in terms of ewes that have length and evenness — they are a great deal better than a decade ago.”

Depth of quality in the ewes was a reason why prices hung-on so well above $400.

The ewe lamb section still had the breeding and potential, but not the bloom or weight of other seasons. Agents said the ewe lamb yarding was several kilograms lighter than last year, highlighting how young stock have struggled in this production year which had a late autumn break and then turned wet and cold.