The current stretch of prolonged dry weather, which has seen less than 50 millimetres of rain fall on a vast area of eastern Australia during the winter growing period, has had an adverse effect on saleyard sheep prices.
According to data collated by Meat & Livestock Australia’s the supply of lighter ewes increased as the 2018 winter progressed, leading to a widening of discounts among the major mutton indicators.
MLA reported 37 per cent of the ewes sold in NSW and Victoria weighed less than 18 kilograms carcase weight last month, compared to just 16pc in August 2017. During July and August ewe yardings increased along with a significant rise in mutton slaughter.
Despite this considerable supply increase, mutton prices remained surprisingly strong. The eastern states mutton indicator September opening price reached 477c/kg cwt – reflecting a 17pc jump year-on-year and 35pc above the five-year August average.
In the past two months, NSW and Victorian saleyards’ throughput surpassed 500,000 head, which was close to double that of 2017. Included in this was an increased number of drought-affected ewes that fell outside the specifications of the mutton indicator.
In January 2017, the eastern states mutton indicator averaged 408c/kg cwt, while ewes less than 18kg cwt averaged 403c/kg. In August 2018, however, the mutton indicator averaged 432c/kg cwt, while lighter ewes averaged 361c/kg cwt, representing an 18pc discount.
This means a 16kg cwt ewe would have made on average $66/head in August, while a 19kg cwt ewe would have sold for approximately $90/head (with an $8/head skin value), resulting in a carcase weight gain of 3kg/head earning a producer an extra $24/head at the saleyards.
Elders key account manager, Ron Rutledge this was “only the tip of the iceberg".
“There has been a lot of surplus sheep sold from the sheep populated areas of Riverina in particular,” he said.
“I don’t think I’ve seen it so bad – even in the summer months and now only September. Farm managers have pulled a lot of levels to adjust to the deterioration conditions.”
“Most have sold all of the surplus stock, many have quit their fellowers (lambs) and some now they are looking at selling for preservation, quitting some or all of their keeper breeding stock’.
“They’re doing what it takes to adjust to the changing conditions relative to the cost of buying feed. And for some operators the decision may be to totally destock it’s been so bad for so long in some areas he said.