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What sheep farmers could earn for ewes this spring

A critical shortage of ewes and booming lamb prices could see breeder rates break through a magical price barrier this spring, as the industry grapples with a low national flock.

A critical shortage of ewes and booming lamb prices could see breeder rates break through $500 a head this spring, as the industry grapples with a low national flock.

Two major factors — seasonal conditions and cash flow — will be key, but dwindling offerings and record-breaking surge in lamb and mutton values are expected to heavily influence prices for restockers.

Last week’s market high of $440 at Wagga Wagga for extra heavy lambs capped a record run, with national indicators tracking above 1100c/kg carcass weight for trade and heavy lambs, and about 800c/kg for mutton.

The spike in lamb prices has compounded breeder supply issues, tempting producers to cash in rather than hold young ewes for future feature sales.

Agents in key areas such as Naracoorte in South Australia are already forecasting numbers will down by 30-40 per cent for their annual first-cross ewe sale as dry conditions take their toll.

Sheep consultant Jason Trompf said in April he expected ewe prices to reach $400-$500 and believes a good season would lock it in.

“When I said this, lambs weren’t making 1100c/kg, they were making 780-800c/kg (carcass weight),” Mr Trompf said.

“There will be a shortage of ewes on the market for sure.”

He warned, however, that high confidence in the lamb market would only translate to ewe values if there was a “proper break”.

“We could be just one to two months off record ewe prices if we get rain and the feed takes off in August,” he said.

“The season needs to get going but we know there is a sheep shortage that I originally thought might hit next year in terms of prices, but now looks like it will this year.”

The shortage has been fuelled by a massive sell off of mutton sheep, which hit its highest weekly level in almost 20 years in December.

National Livestock Reporting Service market information manager Stephen Bignell said the official slaughter figures highlighted the scale of the destocking.

“There’s no doubt the there’s been a big cut into breeding ewes,” Mr Bignell said.

Attractive lamb prices have also prompted some producers to send ewes for slaughter rather than hold them for spring sales.

“There are definitely options for producers to sell ewe lambs to the trade, but this decision will be made on an enterprise by enterprise basis,” Mr Bignell said.

“No doubt, some have done this.”

Naracoorte agents expect fewer first-cross ewes at their annual November sales. Elders agent Tom Dennis said a tough season and subdued returns in recent years were the main reasons.

Tom Dennis, Elders Naracoorte, SA, does not expect prices to explode.
Tom Dennis, Elders Naracoorte, SA, does not expect prices to explode.

He said vendors were expecting higher prices than last year, but not for the market to explode.

“I think prices will post a good average this year, and will probably take off next year,” Mr Dennis said.

“People will be cautious in what they spend, but if there is grass, well that’s proved me wrong before.”

In the NSW Riverina, Hay’s sheep sales will kick of in September, with about 30,000 sheep expected.

Selling action at the Hay sheep sale last year - prices are expected to be higher this spring.
Selling action at the Hay sheep sale last year - prices are expected to be higher this spring.

Nutrien Hay livestock agent Geoff McDougall said the season would ultimately dictate ewe values, but strong mutton and lamb prices would encourage buyers.

The weather could also see some Riverina vendors sell their ewes earlier than normal.

“The frosts have taken their toll on feed which is going purple and we really need rain in the next few weeks,” Mr McDougall said.

He added that while ewe prices might not break records, more sheep would make stronger money.

“Last year, we saw the middle run of sheep selling to the trade (meat industry) and there will be a lift in prices for this category with a lot more making $200-$250 compared to similar sheep making $160 last year,” he said.

But Coreen NSW first-cross producer Bill Bott said he did not expect prices to reach the levels some were predicting.

Mr Bott, who will be both a buyer and a seller this spring, plans to offer 900 first-cross at Corowa and buy replacement Merino ewes.

He said the exit of producers over the past few years had shrunk the buying base and that seasonal uncertainty and tight finances would likely keep a lid on values.

Bill and David Bott at last year’s Corowa sheep sale, where their ewes made about $300.
Bill and David Bott at last year’s Corowa sheep sale, where their ewes made about $300.

While record prices were being paid, he noted, these were limited to small pen lots and not representative of the broader market.

“We are in uncharted waters in terms of the people who have left the industry and this could impact the depth of demand,” Mr Bott said.

His top price to date for first-cross ewes is about $500, compared to about $300 last year.

“To get the big prices, we would need a big spring and plenty of feed,” he said.

“We will work on getting a bit more than $300 and anything more than that will be a bonus.”

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Original URL: https://www.weeklytimesnow.com.au/livestock/what-sheep-farmers-could-earn-for-ewes-this-spring/news-story/16cff887f8ceec78d55af32ccacb325d