Sheep prices fall in the second half

After a spectacular start to the sheep production season the gloss has come off, and with each further fall in schedule price, sheep farmers profits are diminishing. After the previous weeks thoughts that the lamb schedule was near the bottom, more falls were seen last week and with them suggestions that some processors are financially feeling the heat of the slow production season and rapid falls in pricing. Lamb figures show that the season is not even half completed so many will have missed those early boom prices.

The recent falls in values have focused farmers to process sooner and numbers harvested for lamb are now for the first time ahead of last year, with average carcass weights now over 18kg. Latest export processing figures have shown a nearly 50% increase in lambs killed for the month of February as operators tried to quit as many animals as possible before the schedule dropped further. The increase in carcass weight over last year is the equivalent of over 90,000 animals at 17kg and will in some way make up for less animals grown.

Farmers in the south quit as many cull ewes as early as possible at the heady values, but still the kill is well behind and reflects changing landuse to dairying. The fall in cull ewe values has been spectacular with those not harvesting early $70-$80 per head worse off, from levels of $140 per head common at saleyards and in yards from processors.

Those operators that traditionally sold store, finished later or quit because of the southern drought, will now be pleased they made early decisions to accept the high prices on the store market, as many prime values now are behind those levels achieved. And they will have plentiful feed for breeding ewes and replacements which will reflect in next years income. With low numbers and buyers more optimistic for later winter/spring lamb schedules store lamb values have now increased after a period where prices reflected the current schedule.

While prices are well back on last year, optimism remains amongst sheep farmers as good feed conditions and lower numbers maintain demand, and this was seen by record entries in this year’s Golden lamb awards presented at the Wanaka Show. Farm prices and sales are on the up with more farms sold in a twelve month period since May 2009, and optimism was also seen in spending at product and machinery field days.

WOOL

The recent small momentum in wool prices continued at the latest auction, and values have lifted 20-30c/kg clean since the early February lows. Indicator clean prices for fine crossbred have lifted to 585c,  for coarse crossbred 517c, and 567c /kg for lambs and are again contributing significantly to sheep farmers incomes.

The wool levy dispute fails to die as a prominent sheep breeder submits a remit to Beef and Lamb NZ’s annual meeting calling for an evaluation of the nil levy and investigation  of whether future funding could add value to growers. The Wools of NZ Trust business is still start its operation and 4300 farmers who are paying a voluntary levy will be eager to see it performing.

CLICK HERE for Wool Charts