Friday, March 29, 2024

FROM THE RIDGE: It won’t last so enjoy it while you can

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The headline, Prices go crazy, on the front page of last week’s Farmers Weekly is the one I’ve been waiting my whole farming career to see.
Reading Time: 3 minutes

Annette Scott reported red meat prices are sailing in uncharted waters and told us of some wethers that sold for $373 a head. She quoted auctioneer Hamish Zuppicich as saying it makes for an expensive sausage.

I naturally assumed this is Coalgate auctioneer talk that means prices are red hot and going through the roof but reading further I see these sheep were actually destined for a butcher’s shop and ultimately, yes, maybe sausages. No longer are sausages the food of the poor and you won’t be buying them for $1 at the next fundraising sausage sizzle any time soon.

I sent 500 lambs to the meat processor last week straight off mum so not at big weights but at 17.1kg and with a $9 schedule they netted $151, which is very cool and pleasing. A $75,000 cheque before GST was something I would never have dreamed of in the past. I might have to frame that kill sheet. And there are another 1500 or so out there on the farm waiting their turn.

Old ewes are also making in excess of $150 and I’ve been killing two-and-a-half-year-old bulls for more than $2000/head.

I was told the other day some wag reported he’d just killed his old ewes for $170 and has spent decades going to wool crisis meetings, which got us nowhere, but never to a crisis meeting over the price of mutton.

Now you whippersnappers who have been in the sheep and beef sector for the last four or five years will be thinking this will go on forever and it has always been thus.

Well I don’t want to sound like the four Yorkshiremen in that classic Monty Python sketch but it hasn’t always been so.

In the late 1980s, just three or four years into my farming career, things got pretty grim.

Not only were we beset with droughts but our best markets for lamb were Iran and Iraq, which were determined to exterminate each other during their terrible war and were buying our little 14kg carcase weight lambs and we were getting $24. Goodness knows what we would have got if they weren’t in the market.

I killed ewes for a couple of dollars a head but I heard of folk getting bills after they sent a load to the works.

We speculated IRD should be giving us tax relief for eating our own muttons.

But from memory wool prices were something like $5/kg so it could have been worse.

Some people, including one or two from my discussion group, exited the industry but most of us hung on. It’s hard to believe now given how dire the prices were but we did.

It was the period when farmer’s wives got into their cars and drove to town to work. It was relatively rare before that but an important survival mechanism.

The 1990s slowly improved but it wasn’t until the early 2000s when we had a couple of ripper years that the pressure finally came off and we could see a brighter future ahead.

And here we are now in the promised land. 

Exceptionally strong demand from China with other countries like the United States competing has driven prices to these levels and it sounds like they will remain firm for the rest of the season and maybe beyond that.

However, without sounding negative, one day the bubble will burst and we will head back to the average. I haven’t seen it yet but when someone starts saying this is a new paradigm, it will happen soon after.

So, make hay while the sun shines, enjoy it while it lasts, don’t squander it, pay off debt and start providing for the tax your provisional tax isn’t covering.

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