With record processing prices for mutton the sale was always going to be the real test for the market, PGG Wrightson livestock manager Joe Higgins said.
With just 6000 ewes offered and close to 100 registered buyers it was a sellers’ market with clearly not enough sheep to go around.
“We had a complete clearance.
“No surprises in that given we had probably the smallest yarding ever and one of the biggest buyer galleries for many years.
“Certainly, sheep are in demand and if you wanted them you had to dig deep,” Higgins said.
With processors driving the upward trend it was expected prices would be upwards of $200.
“We knew the market would be north of $200 but didn’t know where but when you can kill these ewes for $170-$180 at the works then the indicators were there for a very good sale and there’s no disputing it was a very good sale.”
While bidding was slow at the start on the younger sheep the gallery soon realised if they wanted to buy then they had to bid up.
“Buyers were getting the wobbles at $220 but bidding got more brisk as the sale went on and they realised they were likely to miss out.
“That saw the older sheep selling at $190-$210 achieving better premiums than the younger sheep.”
Overall the sale was a reflection of the high mutton prices in autumn when farmers sold ewes rather than putting them in-lamb.
The mutton kill season to date is already above the final slaughter tally for the past two seasons.
“We struggled to get the 6000 ewes we did offer. Traditionally we would have been up around the 20,000. This is just the sign of the times.”
Higgins expected confidence in sheep to hang in for a bit yet.
“It’s not looking like doing an about turn anytime soon and certainly it’s looking good up until Christmas.”
The lamb schedule hitting $8 a kilogram much earlier than expected and record highs in mutton prices at $5.20-$5.30, up $2/kg on five-year average prices, across both the North and South Islands is lifting confidence to levels not seen for many years in the sheep industry, Higgins said.
Global demand is also at all-time highs and driving the firm demand from processors.
At what cost this will be to New Zealand lamb production or what risk it might pose to niche market NZ lamb is questionable.
But meantime the production level is a profitable one and farmers are responding, Higgins said.
Ashburton farmer Darryl Whiting paid $236 for a line of mixed 2, 3 and 4-shear Texel Romneys, the top price of the day.
He was there to buy good ewes, going on to pay $216 for two-shear Border Romneys.
“The industry is looking the best it has in 10 years.
“It’s a bit of a numbers game but the buoyancy we are seeing now looks as though it will be sticking in there for a while.”
Whiting used to run a breeding flock of 2000 on his Willowby property just south of Ashburton but with the downturn in sheep he’d dropped ewe numbers to 500 and gone 50-50 sheep and cropping.
“But I’ve dumped cropping now and am rebuilding ewe numbers. Realistically, I would like to get back to 2000 but I’m not getting any younger so chasing ewes around at lambing is not so attractive these days.”
With wool still a downside Whiting is taking options, this year trading 5000 store lambs.
“Once I used to get a $20,000 wool cheque, now its $7000-8000. You can’t carry a ewe for 12 months for just for one lamb.
“I was here to buy today to build up flock numbers but trading will be a big part of my game now as I look to concentrate again on the good times in sheep.”
Retired livestock agent Noel Hewitson bought a line of 4 and 5-shear ewes for $217.
“It was a bit more than I expected but the industry is very strong at the moment and scanning at 190% they will be sustainable for good returns to replace sheep sold earlier.”
An agent for 40 years before retiring in 2015 Hewitson recalled the days when ewes were selling for $3. Now we are paying over $200.
“There’s been some real ups and downs in the past 40 years but there’s real strength in the market now and it’s very sustainable.
“There’s certainly a good future in sheep farming,” Hewitson said.
