“Most farmers are still buying in some lambs but in pairing up operating costs to secure an income for next year there’s a lot of unknown so cutting back in lamb numbers comes for a multitude of reasons.
“Talking to farmers it’s looking like there’ll be up to 30% less lambs coming onto Mid Canterbury cropping farms this season,” Leadley said.
Where 10,000 lambs might have been the order of the day that is now more likely to be 7000-8000, amounting to tens of thousands of lambs that will not find a home in Mid Canterbury this season.
“While it’s dry here there is feed available, masked by irrigation, but there’s not quite the same abundance of feed and given the huge uncertainty in lamb markets there are other options for farmers to consider.”
Market value is of concern as the schedule for lamb continues to drop because of weak international demand.
Kill sheets are reading about the $6.45 a kilogram mark with a further 15c cut signalled for this week, bringing pricing 60-70 cents behind the same time last year.
Farmers are also nervous given the lack of processing assurance to get lambs off farms in time for spring cropping.
“Right now farmers are nervous about overstocking and don’t want to commit to short-term lambs as it’s unclear when these could be offloaded and the same for heavier lambs.
“The past couple of seasons there’s been good markets for heavier 21-27kg lambs and with meat companies not able to give signals around pricing there’s real concern where these markets might sit in three to four months’ time.”
Most cropping farmers rely on a winter income. They are doing their budgets and it is very risky with the amount of capital involved in lambs, Leadley said.
“Yes, it’s been a good harvest but there’s no immediate cashflow as it’s sitting in seed stores and silos not yet converted into cash.
“Buying in store lambs is expensive and the banks are putting the brakes on.”
As a result, more earlier winter wheat and barley crops are being planted with selling grazing also an option farmers are pondering.
“The drought feed shortage is not going away in a big hurry so there’s potential to graze ewe lamb replacements and graze store lambs without the capital outlay of buying stock.
Leadley acknowledged the lesser number of lambs going into Mid Canterbury will have a knock-on effect.
“Many of these lambs at this time of the season are coming from Southland so there will be a knock-on effect down the chain for farmers in these regions getting rid of the last of their store lambs.”
But it’s not a case of not wanting lambs forever.
“This is not about a massive lack of appetite from farmers wanting to do lambs. It’s about balancing the budget in the environment in which we are currently operating.”
