PRODUCERS are weighing “keep or kill” options with older sheep to best capitalise on the burgeoning mutton and lamb markets.
This has resulted in a reduction of restocker sheep numbers at sales across the country and increased competition from processors looking to secure mutton.
According to Meat and Livestock Australia’s (MLA) National Livestock Reporting Service (NLRS) the mutton indicator hit its highest point since July last year – 357 cents a kilogram carcase weight (cwt) last week.
Statistics from MLA show the sheep slaughter for 2015 is back 25 per cent year-on-year for the January period, at 123,485 head per week, following what was the second consecutive year of more than 9 million head of sheep slaughtered.
Punters have tipped the mutton indicator would continue to rise as supply was anticipated to slow.
Landmark Bombala livestock manager Justin Lewis said numbers at the Bombala district circuit sale were back about 6000 head last Wednesday, compared to the usual 17,000 to 18,000 surplus ewes and wethers offered at the sale.
“We had 11,430 sheep, which was well back on usual because the season has been so good,” Mr Lewis said.
Mr Lewis said processors were at the sale but hardly got a look in due to strong restocker demand.
“The processors could only buy about 500, 71/2-year-old ewes as the restockers didn’t want those,” he said.
The top price of $143 was paid for 41/2-year-old Merinos, 51/2-year-old ewes sold to $130, and 61/2-year-old Merino ewes sold for $106.
Mr Lewis said older ewes and wethers sold by clients direct to the processor in the past month had returned a solid $80 average.
Barellan livestock agent, Mark Flagg, Flagg Livestock and Property, anticipated there could be a premium paid for scanned-in-lamb (SIL) first-cross ewes at the annual Barellan First-Cross Ewe Sale on February 6.
Mr Flagg said buying the SIL units was a good opportunity for restockers to replenish their ewe flocks and also make a speedy return on investment from the buoyant lamb market.
He expected local restockers would be competitive at the sale as there was a lot of lucerne feed about the district from above average summer rainfall.
Mr Flagg, who operates as a selling agent at the Griffith prime sale, expected Merino ewe numbers, suitable for the mutton trade, would dwindle.
“Traditionally, ewe numbers ease as we move into winter and I expect this year we should see the mutton price kick on as we struggle to get the older Merino ewe numbers through,” he said.
GJ Hulm livestock agent, Isaac Hill, Wagga Wagga, said sheep numbers were holding week-on-week at the Wagga Wagga prime market, but mutton numbers were a lot lower compared to other years at this time.
He said 95 per cent of the sheep at Wagga Wagga yards were at the moment bought by processors.
“There is a real even spread between the processors taking mutton, which is unusual, where normally there is one processor in particular that is firing,” Mr Hill said.
“I think processors have adequate supply at the moment, but by the end of March they will have to compete a lot harder as supply tapers off.
“The mutton market has been very good for 18 months to two years, while we have seen it dearer, it’s pretty solid.”
Quality wise, Mr Hill said the sheep couldn’t be in better condition as they had come off stubbles or summer grasses boosted by recent rain.
He said some producers had also opted to hold their older ewes for another year to get an extra lamb out of them while lamb prices were solid.
Quade Moncrieff Livestock and Property director, Paul Quade, West Wyalong, said processors would be forced to compete with strong restocker demand for older sheep at the West Wyalong store sale on Wednesday, as there was plentiful supply of feed across the region.
“A lot of local producers received 100 millimetres of rain in January.”
“We usually get 20mm of rain in January, so many were looking to utilise the feed they have with some extra stock,” he said.
For that reason, a few vendors have opted to hold on to their stock.
Mr Quade said some producers had already sold suitable older sheep at prime sales at Wagga, Forbes and Griffith, as well as direct to the processor in the past fortnight.
A client received $90 to $100 for 61/2-year-old Merino ewes at Griffith and another $122 for three-year-old Merino wethers they sold to processor Fletcher’s International at Dubbo.
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