Dry weather helps push sheep prices down

SIMON BLOOMBERG
Last updated 12:10 19/02/2013
Cas Round
SIMON BLOOMBERG/FAIRFAX NZ
BUYER'S MARKET: PGG Wrightson’s Peter Taylor takes a bid at Brighwater open ewe fair

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Prices at the annual Brightwater annual ewe fair did nothing to cheer up sheep farmers around the Nelson-Tasman region, with the top two-tooths reaching just $131, about $80 lower than last year's record high prices.

PGG Wrightson and Stronach Livestock offered 2636 ewes, including 1141 two-tooths, at last Thursday's sale and prices across the board were down. The top two-tooths ranged from $120-$131, medium two-tooths from $100 to $115 and small two-tooths from $80 to 95, while annual draft ewes ranged from $45 to $80.

PGG livestock agent Peter Taylor said those prices were consistent with sheep sales around the country. The combination of a decline in the meat industry and dry weather had been pushing prices down and the low returns at the Brightwater sale were not surprising, he said. "I told one of my clients to expect prices around $80 lower than last year and that's what happened," Mr Taylor said. "It wasn't buoyant."

Mr Taylor said the number of sheep entered in the sale was also down on last year, when 1525 two-tooths were offered.

Federated Farmers Nelson president Gavin O'Donnell said the slump in this year's ewe prices was bad news for farmers.

The "extreme volatility in climate and market prices" was also making it difficult for them to plan ahead, he said.

"It's reflective of lamb and wool prices but it's such a huge shift from last year. It makes it very hard to manage a business when the profitability fluctuates so much year-on and year-off."

He said that the impact of the volatility was likely to hit harder in the Nelson-Tasman region, where there were a higher proportion of small farms. The bigger farms had economies of scale and larger cash pools and were less vulnerable to market volatility, he said.

Mr O'Donnell said low prices was not the only issue facing meat and wool farmers around the region. A dry spring had forced farmers to sell stock earlier than usual and now they were moving into autumn and winter with lower than usual feed reserves.

"We had a late, dry spring and then we went into a hot December so there's very little conserved feed around. That's a concern because you need good-quality feed as we move into autumn to get good lambing percentages."

However, Mr O'Donnell said the Nelson-Tasman region was not as dry as other parts of the country which were experiencing a severe drought. Rainfall during late December and January had saved the day and now the region was experiencing "a traditional Nelson summer" rather than a drought.

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