Thursday, November 30, 2023

Headwinds toughen outlook for lamb

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Plenty of options for buyers, but signals beyond the farmgate have them feeling cautious.
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This year hasn’t been the easiest to farm through for all sorts of reasons, and it appears farmers will need to have a resilient mind-set to finish the year off, especially for those with sheep.

High lambing percentages and good survival rates over lambing have gone some way to buffering the loss of land and subsequent ewe numbers to forestry, and a flurry of new season lambs are now entering the sale ring. These are appearing in decent numbers at the early saleyard of Stortford Lodge and are now starting to make an appearance at Feilding as well, along with paddock and on-farm sales. 

So there are now plenty of options for those in the market for lambs, but it is a market that buyers are approaching with some caution. A lack of overseas demand is being felt at farmgate level. This is reflected in schedule prices that are set to continue their southern journey. 

One of the main culprits of the decrease in demand this year is Australian product flooding the market at a much cheaper price than New Zealand can offer, and that is impacting our bottom line. This situation doesn’t look set to change any time soon and so the reality is that the 2023-2024 season is shaping up to be a tough one for lamb.

The season typically starts off at premium price levels and that was no different at Stortford Lodge this year, where the first offering just prior to Labour weekend averaged $93 per head. The week following, the average price decreased to $89 and that steady downward trend continued to the most recent sale as it rested at $84. 

These are the lowest average lamb prices recorded in the past five years with the closest year being 2020 at $97-$108. AgriHQ records date back to 2008, and there was a big turning point for store lamb prices between the 2016 and 2017 seasons with prices lifting on average $30 per head into 2017 and remaining at higher levels until this year. 

In that period, the strongest season was 2019 when prices averaged $118-$143 for late October to early November, while the weakest seasons were divvied up between 2012, 2015 and 2016 with all posting averages of $69-$85. 

As a percent of the current lamb schedule, recent yardings came in at 44%, leaving some room in the pot for better prices, though the concern is where the schedule will end up. Historically, that is outside the common range of 45-47%, dating back to 2008, though is not the lowest as that honour goes to 2008 at 36%.

Feilding prices and trends have reflected Stortford Lodge’s as the market started off at an average of $95 and the subsequent week hit $89 per head. However, very low volume has been traded to date and will pick up in the coming weeks.

A new option for buying lambs on the east coast of the North Island has been added, in the form of on-farm sales. To date, three of these have been held with a further three on the books before Christmas. 

Results from these sales have been positive and Hazlett agent Rowan Sandford said most were above recent paddock price levels.

“Most lambs in the paddock have been trading at around $3/kg liveweight and the on-farm sales were above those levels,” he said. 

“The sales were well-supported, and vendors were happy with the results. At Mangakuri Station, Elsthorpe, the top lambs sold for $90-$118 and the balance returned $54-$83. Te Manuiri Station followed and sold their lambs for $42-$117. Both properties offerings were undrafted, while at Brooklands Station, Puketapu, more recently the lambs had been weaned five weeks and the tail-end were not offered for sale. The extra time off mum paid off and the top line made $121 while the balance sold for $69-$104. Buyers covered a large portion of the North Island for all sales from local to Manawatū, Bay of Plenty and Waikato.”

While South Island activity has been quiet to date, it is about to ramp up and at the JG & DA Crawford sheep sale in Oxford recently, 1300 blackface-halfbred lambs sold well with a small prime line at $131 and the balance making $65-$109.

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