Analyst Intel

31 May 2019

ACROSS THE RAILS: Forestry conversion brings out more breeding ewes

BySuz BremnerSuz Bremner

A really pressing issue emerging in the last few months centers on Government incentives to plant trees – the Billion Trees plan as politicians like to call it.

At the farming front, we are seeing a rush of mainly high-country sheep and beef farms in the North Island snapped up for conversion now rule changes have made it easier for foreigners to invest in land for forestry. I won’t delve too deep into the politics but at the stock selling end we have seen a spike in breeding ewes hitting the market as they make way for trees. 

Some of these breeding ewes are generations worth of breeding and it can’t be easy for farmers to see their ewes heading out their farm gate but the Government’s decision to support forestry planting means those looking to farm the land are being priced out of the market. Even for places that were not on the market, the opportunity is just too attractive to turn down.

Good volumes of breeding ewes for sale have become a rarity in recent years as national flock numbers fall but the farm sales mean there has been a resurgence this year, with quite literally thousands being sold in the paddocks on the big hill-country properties and more entries heading to the yards. Luckily, that increase has come at a time when sheep farming is in a good place and buyers are confidently going to market with good budgets. Strong prices for cull ewe and a good outlook for lambs mean a few extra players have entered the market. That means most of the extra ewes are being bought for breeding, which does come with a sigh of relief because there won’t be a significant fall in breeding ewe numbers. I do, however, think if the sheep meat industry was not so positive we would be looking at a very different scenario.

Across both the paddock and auction sales, it appears $190 a head is a comfortable level. At auction five-year Romney ewes to terminal sires, with scanning percentages commonly at 160%-200%, are easily making $180-$205 while reports of paddock sales for three to five-year ewes have hovered around $190.