Ewe beauty, it’s record sales

There is no denying Australian sheep values are trading at record highs, analysts admit, with prices exceeding more than $500 per head amid a dwindling supply and Eastern States farmers’ eagerness to re-stock. However, Mecardo analyst Angus Brown has posed the question: can the current market circumstances justify almost $450 a head for a line of crossbred Merino ewes? Mr Brown acknowledged prices for breeding stock continued to surge, with AuctionsPlus reaching all-time online sale highs as the Australian sheep market remained red hot. During the online system’s national sheep sale on May 19, a farmer from the small NSW town of Deniliquin fetched a whopping $446 per head for a line of 81 ewes. The Border Leicester-Merino crossbreds, which were sold under the Nutrien Ag Solutions banner, were from an April-May drop last year and were 100 per cent scanned in lamb. AuctionsPlus commercial operations officer Holly Baker said the result “broke online records for the highest-selling ewe in AuctionsPlus’ history”, after a buyer based in Benalla, Victoria, bought the 13 to 15-month-old ewes weighing 66kg. The $446-a-head price was almost eclipsed during the same sale after a line of 157 Border Leicester-Poll Merino ewes from Cowra in NSW snared $443. However, the $446 record failed to stand for more than a week after a farmer from Oberon in NSW sold 49 two-year-old station-mated Meat Plus ewes and a lot of 55 three-year-old station-mated Meat Plus ewes for $503 per head last Tuesday. The two lots of ewes were mated, but not pregnancy scanned. Mr Brown said the the rise in breeder sheep prices was “no doubt in response to abundant feed in de-stocked areas” after strong rains across NSW and Victorian agricultural regions, which had been ravaged by drought since late 2017. Using the $446 sale as a yardstick to determine if prices of more than $440 per head are justified, Mr Brown said the result was elevated because the line of 81 ewes all scanned as carrying multiple lambs. “The record mob of sheep scanned as all multiples, which is why they managed to beat a couple of mobs that scanned at 170 per cent — assuming all multiples were twins — but only by $3 per head,” he said. “The record ewes are due to lamb in the second week of July and were shorn in November, so would be likely shorn again in November, cutting a net $24 per head — 3.5kg clean at 850¢ — at current prices.” Assuming a lamb survival rate of 90 per cent, Mr Brown said the 81 ewes would produce up to 146 lambs in total. “At good growth rates, lambs will reach trade weights of 45kg to 50kg by late November,” he said. “At a price of 7.50¢/kg carcase weight, lambs will make $153/head and the ewes will produce $275 worth of lambs. “After the gross income from lambs and wool, after six months buyers end up with a ewe which has cost $147, plus all the costs associated with getting it to the end of the year.” Mr Brown said paying more than $400 per head for twin-bearing ewes should lead to a positive return on investment given current sheep prices. However, he warned potential sheep prices falls were an issue. “At good lamb prices, spending over $400 on ewes with multiples should be profitable,” he said. “There is plenty of risk if lamb prices decline during spring and summer.”