14
Best trade/specialist publication and website – Voyager Media Awards 2019
Vol 18 No 48, December 9, 2019
Red fruit gets green light
farmersweekly.co.nz
$4.00
Incl GST
Shortsighted? Annette Scott
E
annette.scott@globalhq.co.nz
XPERTS fear high ewe prices are encouraging farmers to sell breeding stock to processors at such a rate New Zealand exports might in a few years not have enough product. That would provide an opening for Australia to grab market share from NZ. There is also a worry a shortage of stock could lead to a single desk seller, thus eliminating procurement competition. The problem is compounded by the falling number of farmers willing to breed the lambs. Many young farmers are not interested and instead buy in store lambs to fatten. AgriHQ senior analyst Mel Croad says looking at the Australian sheep industry’s intentions for the next two years there’s reason for caution, signalled initially by Australian lamb exports at 66% of total production, up from 56% five years ago and on the back of a depressed breeding flock. “Australia has made inroads into the export market very quickly and it’s concerning when we are not seeing any growth here, when our closest opposition is capitalising and playing the long term game.” First cross ewe lambs in Australia are selling upwards of $370 to go back into the breeding flock and that’s achieving those
prices when the schedule is less than $8. “At $9 a kg here it will be interesting to see if our breeders capitalise and sell their ewe lambs. “The mutton schedule is $6.20/kg, up from the $2.90/kg in November 2016, but while the combined annual sheep meat exports of NZ and Australia are growing 20,000 tonnes a year, that growth is Australia,” Croad said.
Having a breeding ewe flock is not an attractive option for much of the younger generation. Suz Bremner AgriHQ “They have wiped out four million from their sheep flock over the past couple of years, which, as of June 30 this year, is at 66 million but their future forecast data has the flock rebuilding to 74 million by 2022 – that’s a rebuild back to last year and some, despite drought and poor lambing. “Certainly, there’s nothing coming out of NZ that replicates that upside.” Croad said productivity gains are not offsetting the lower number of breeding ewes. “We are in record territory at the moment. “If the idea is not to increase
flock numbers then we need to be investing in genetics and technology. We need to get some confidence.” AgriHQ analyst Suz Bremner said returns for mutton and lamb are $1/kg CW or $30 a head up on last year and, typically, where buyers are looking to replace ewes they will work on paying $30-$40 a head more than they received for their cull ewes. That equates to a $60-$70 a head increase in price this year. Compared to last year’s prices that would put most ewes at an expected $260-$350 this coming breeding ewe fair season but Bremner said there will likely be resistance at the $300 mark. “I would expect to see a lot of good breeding ewes easily trading at $200-$300 with two-tooths more towards $250-$300 rather than the $200-$290 we saw last year.” Some will exceed $300 but it’s not predicted to be a regular occurrence though the annual draft Border Leicester-Romney two-tooth ewes sold at Temuka in February will likely push to $350. “I doubt we will see an influx of new buyers to the market as it seems that having a breeding ewe flock is not an attractive option for much of the younger generation, who would rather buy in and fatten lambs. “That makes for an interesting future as you can’t produce lambs from trees and crops.” Livestock broker Peter Walsh
Continued page 3
THE SAME BUT BETTER: Gore farm consultant Graham Butcher says southern farmers are looking to do their existing stock better rather than reducing or increasing ewe numbers. Photo: Natasha Chadwick
THE RURAL INSURER WITH MORE RUBBER ON THE ROAD. AND ON OUR FEET. At FMG, we like to do business face to face whenever we can. Which is why we’ll often come to the farm to give you the advice and specialised insurance you need. And if we can’t, we’re always here to chat things over on the phone, person to person. It’s the kind of personalised service we’ve been providing for farmers all over New Zealand for over 110 years. And it’s something we’ll continue to do for many years to come. If that sounds like the kind of insurer you’d like to deal with, ask around about us. Or better still, call us now on 0800 366 466.
We’re here for the good of the country. FMG0982FWFPS