“It’s extra dry North Island wide and it’s extending.
“Tight feed supply, long waits for slaughter, uncertainty in the markets – it’s time to make a plan,” Martin said.
Farmers have just got to move lambs and that’s significantly affected the store lamb market, so much so there’s a steady flow of store lambs crossing Cook Strait to greener pastures in the south.
“They are struggling up here and there’s opportunity to sell to the South Island.”
Martin and several other agents are buying for South Island lamb finishers, mainly in Canterbury and to Southland.
Feedback from the South Island is the real demand is yet to kick in and the price differential at almost $1 a kilogram live weight makes it a good deal for buyers and a saving grace for desperate northern vendors.
Pockets of optimistic buyers are taking on the cheap lambs but Martin expects that could change once the numbers coming out in the north because of the prolonged dry are soaked up and the South Island store season ramps up.
It’s not just the dry in the north that is stressing farmers, a water shortage is compounding the situation.
“It’s gone from a feed crisis to a water crisis and that’s resulting in some lesser quality store lambs coming in for sale and that’s also being reflected in the pricing,” Martin said.
Prime lamb space is very tight at processing plants. Farmers can’t get lambs killed and there’s a four to six-week wait to get cattle in.
“It’s a grim story from the North Island.
“And while our phones are telling us we are going to get rain – it’s not happening.
“The South Island has been a godsend. I don’t know what we would do if we didn’t have the South Island to offload to,” Martin said.
While store lamb prices have remained steady at $3-$3.50/kg in the South Island, up on North Island prices of $2.20-$2.60/kg, PGW livestock manager Joe Higgns said the Tekapo and Omarama Merino and halfbred store lamb sales on Thursday were some of the toughest selling he’s experienced.
“They were very difficult sales due to the lack of buying power and, of course, these breeds do have a limited market anyway given the regions they are suited to.
“The schedule sliding every week has also knocked confidence.”
Merinos usually fetch a premium over halfbreds because of the wool factor but that didn’t happen.
“It was just slow bidding, only one bid on a number of pens.”
Of the 10,000 lambs offered at Tekapo about a third were passed in but a lot were negotiated and sold after.
“Not that many would have gone back home but it was hard work, the hardest selling I’ve experienced almost forever,” Higgins said.
Most vendors’ lambs sold at auction $20-$30 a head back on last year’s sales.
The tops of the Merinos at Tekapo sold from $100-$120 with an exceptional couple of pens making $133, medium types sold from $80-$100 and lighter lambs $50-$75.
In the halfbreds at Omarama the tops ranged from $3-$3.30/kg, mediums $3.20-$3.50/kg and lighter lambs $2.70-$3/kg.
Higgins said crossbred store lamb prices remained steady despite the influence of lower priced lambs from the North Island crossing the Strait.
Demand for good-quality lambs is still there with confidence in the winter trade if buying now and selling in spring.
“It’s been a very successful and profitable option for the past two seasons. It’s worked so people are keen to continue,” Higgins said.
He doesn’t expect store lamb values to change a lot now.
“They are not going to get a lot cheaper. Prices will hold firm now unless we get a good rain.”
Meantime the 25th annual Rollesby Valley on-farm sale continued to be popular with prices averaging about $3.50/kg for crossbred types.
Demand was strong from Mid Canterbury cropping farmers, who accounted for about 85-90% of the lambs bought.
