Lamb prices: Spring could favour buying ewe replacements

This spring could be another favourable year for buying ewe replacements, with minimal rainfall now bordering on disastrous in some stock areas.

It could possibly be another spring when good lamb producers could buy young replacement Merino ewes for less than what they have been receiving for decent prime lambs and heavy mutton.

Thanks to the market for heavy suckers being supported at over 800c/kg carcass weight in recent weeks, farmers who have been selling early drop lambs have consistently achieved returns above $200 a head.

These are also the same producers who have been able to capitalise on the stronger mutton market that existed during August and earlier this month for heavy sheep, when values tracked above $100 for good cull ewes.

Combine the sucker lamb and ewe price together and it is in the realm of an income of $300, and the expectation is a lot of young Merino ewes will be making a lot less than this at the season opening special store sheep sale at Hay in the NSW Riverina this Friday.

So far the early price line in the sand for the saleyard sector this September has been a top of $270 for Merino ewes sold at Hillston, NSW, a week ago.

Essentially the talk is this spring could be another favourable year for buying ewe replacements because of minimal rainfall which is now bordering on disastrous in some key stock areas, and a general lack of confidence around the price stability and performance for mutton and lamb going forward.

The changeover won’t be as good as last year when the bottom fell out of the sheep market, but all the data is pointing to an outcome at Hay like in 2017 and 2018 when the average Merino ewe price was below the combined return for a heavy lamb and ewe – see the graphic on this page.

Average changeover prices.

To refresh people’s memory, last year the average price for the Elders run of ewes sold at Hay was $119 a head, in a savage cut from the boom flock rebuilding years of 2020 to 2022 when Merino ewes sold to a record $512 and averaged more than $300 at the peak of the market.

The strength of this year’s Hay sale will depend on buying demand from across NSW with agent feedback suggesting a much weaker level of restocking interest from Victoria due to low winter rainfall and the dry start to spring.

The current meltdown in mutton price will also be a pressure point on the market and immediate buyer sentiment – the national saleyard indicator for slaughter sheep has dropped 50c/kg in the past week, according to figures from the National Livestock Reporting Service.

A gauge of the market is online selling results. The latest price average for Merino ewe hoggets sold on AuctionsPlus was $148, which marks a 50 per cent increase on the trend line of $93 this time a year ago.

If that 50 per cent increase is applied to the average of $119 for young Merino ewes at Hay last year, it would bring the result up to around $180. And that is in the ballpark of the market report out of the recent Hillston sale where well-grown young Merino ewes with size and frame sold above $200, and the plainer types with less scope and weight below this benchmark.

The danger zone for all classes of ewes and lambs being sold going forward is those lacking weight and quality.

It is already starting to show up in saleyard data as the industry reacts to the likelihood of more plainer conditioned and light animals coming onto the market due to the season.

In early trading this week the light lamb and Merino lamb saleyard indicators lost about 20c/kg – dropping back to 649c/kg and 627c/kg respectively – which is a decline double that of heavy and trade slaughter lambs.