Sheep prospects for 2012

LAMB

The summer slide of lamb schedules is continuing, and now helped by dry conditions in the south, although meat industry leaders warn that the slow processing numbers in feed abundant areas, will bite farmers with space delays later on.

Marketers report that there has been some resistance to the high prices for lamb product and with a large percentage traditionally sold into Europe the record strong NZ currency against the euro will hurt returns.

Schedule prices are however still $20-$30 per head (135c/kg CWT) ahead of last year and better feed conditions further north has meant southerners can still unload profitably.

Store lamb prices have eased back with the falling schedule and increased southern supply, but an international supply shortage for lamb meat remains, and marketers remain bullish for the medium term.

With good rains in many parts of Australia, and sheep profits booming, numbers will increase to meet some of this shortage next year.

The trend is Falling with average schedule prices for a Y 17.5kg CWT lamb 700c/kg which is 135c ahead of last year.

Prices from store lambs have already come back by 30c/kg LWT due to the dry, and it will depend how long it is until decent rains, how much the price falls. Other areas have seen caution entering the store lamb market in response to the schedule falls and buyers would be wise to enter into forward contracts before purchasing expensive lambs.

If the wetish summer continues for most of the island as predicted by Met service good growthy conditions will allow hogget mating to take place and top up national lamb numbers even further. This practice is now common by top managers and ensures extra profit for the sheep enterprise.

To view store lamb charts CLICK HERE

EWES

Farmers comment that while lamb price rises have recieved all the positive press, cull ewe values are equally as impressive with most ewes selling for over a $100 or more. Significant premiums are also being achieved for any old ewe that can be carried over for more years of breeding and with plentiful feed in many parts of NZ values should remain high.

Early sales of surplus breeding ewes are attracting record levels and some are predicting that two tooth sales may reach $300 a head. The first major sale has been conducted for two tooth ewes at Stortford in Hawkes Bay  with animals averaging nearly $240 per head with the tops reaching $270. Normally top priced animals are achieved in Southland saleyards but the drought down there may dampen their enthusiasm.

Mutton schedules have eased by 20c/kg since the spring peak but are still 70c/kg CWT ahead of last year. The kill is 30% behind last year but few processors expect this shortfall to be made up as farmers used that year to have a major tidy up of their flocks.

The trend for mutton schedule is Easing with the average price for a 21kg CWT MX1 ewe 435c/kg CWT which is 70c ahead of last year.

WOOL

The last sale for 2011 finished predictably back in value with a stronger currency and falling wool quality being blamed. However wool prices are still 80-90 c /kg ahead of the same period last year and are again contributing to better sheep profitability.

More cots are evident in lines, and colour is appearing in the staple especially in summer wet areas of recently shorn wool, and this combined with a weak European economy and currency, could dampen prices expectations for the new year.

No clear direction is yet seen in the Cavalier bid for Wool Services assets, which will frustrate those farmers committed to defining a clear unified direction for wool marketing.

To view charts for mid micron, coarse and fine cross bred wool CLICK HERE