Quick trades or breeders for the future? Question looms for sheep

Has the traditional way of looking at sheep production shifted and is that starting to shape store values? We delve into an analysis of recent sales.

No price improvement for young Merino ewes on a year ago at a major Riverina store sheep sale last week has caused some serious head-scratching as to what is going on with store sheep demand and values.

In fact, it could be argued a major shift is occurring in how producers view sheep production.

Most 2023 drop unjoined Merino ewes sold from $120 to $160 per head at last Friday’s big

Deniliquin sale, price points which allowed meat processors to step in and purchase.

Saleyard data listed the average ewe price at this event at $148 across 18,829 sold, and this was boosted by the crossbreds which sold to $298.

Last January at this same special sale the average was $138.

Considering the lamb market has been 200c/kg carcass weight better than last summer, and is

coming off a record December result when saleyard averages went above 900c/kg, it can only be deemed a disappointing result to have future breeders meet such lacklustre demand at Deniliquin.

Numerous producers told the Weekly Times their lamb returns this season are trending $40 to $60 per head better than last year.

On top of this the mutton market has lifted off the low rates of late 2023 and early 2024, with decent ewes returning $100 to $150 at recent markets.

The reality was a lot of Merino ewes only made around meat value, or a little better, at Deniliquin. It explains why processors were some of the most active buyers at the sale.

Livestock agents take the bids at the Deniliquin sheep sale. Picture: Jenny Kelly

The comment from Nutrien Deniliquin agent Geoff McCallum was that there “didn’t appear to be a lot of interest in restocking’’.

It was a fair statement on what evolved for Merino ewes but not for other classes of stock.

Crossbred store lambs sold well at Deniliquin, as did the big wing of little Merino wether lambs which “made their money’’ on the day.

The better lines of crossbred store lambs sold from $130 to $155 at Deniliquin to be costing as much as a 1.5-year-old ewe which could be argued had long-term earning potential of five-plus years.

And that brings up one of the interesting discussion points to come out of the sale.

Has the traditional way of looking at sheep production shifted and is that starting to shape store values?

In the past the buying emphasis was often on investing in a young breeder and then keeping it for five to six years as a safe way to roll through market fluctuations and come out ahead in the long term.

Now the focus seems to have shifted to short-term trades and financing stock to be turned around in 90 days or so – hence the interest in fattening lambs.

When going through all the regular culprits as to why ewes had struggled at Deniliquin – the dry season, lack of farmer confidence, worry about the autumn break, the workload associated with running Merino sheep, the shift to cropping, the build up of the sheep flock and the big numbers of ewes imported from Western Australia, etc – the change in attitude to short-term trading was raised as a key issue by agents.

“There does appear to be a problem around people just wanting stock they can be in and out of within two to three months – there doesn’t seem to be as much interest in longer term sheep like a ewe,’’ said Elders auctioneer Jason Andrews.

It was a comment mirrored by Nutrien auctioneer Marc Braybon who said there seemed to be a shift to financing stock on short-term trades within the sheep sector.

“I don’t know if its financial pressure (on-farm) but there seems to be a trend on short-term trades rather than lending for stock on the longer-term which is breeding ewes,’’ he said.

Other comments to the Weekly Times were more pointed, including that financial-farm advisers are pushing the quick trade philosophy, particularly to the next generation of farmers coming through.

“It seems to be all about buy and sell and relating every trade to a percentage return within a few months, and all trades have to be accounted for in the short-term,’’ said one agent.

“The idea you could look to the future and buy a young ewe and wait nine-months for a lamb return but then be set up for five-years of production doesn’t seem to be considered as much anymore.’’