Analyst Intel

11 October 2019

ACROSS THE RAILS | Have farmers lost their passion for sheep?

By Mel Croad

Farmgate lamb prices have never been stronger but we are not seeing any growth in our breeding flocks. The rise of winter trading premiums hasn’t gone unnoticed by breeders and this year many traditional hill-country farms have opted to cash in on that market where they can. For those who couldn’t sustain lambs that long the store market was just reward.

Stud breeders are continuing to perfect their game year in, year out. They are clearly here for the long term. But they need continued buy-in from the commercial farmers to allow them to invest in genetics that will serve our changing environment. Sheep farming is still held in high regard by many but a decade ago it fell out of favour with a proportion of the industry. Some went down the dairy support route, others into beef finishing. The call went out that those options were a much easier way of farming life – no dags, no regular drenching programme, no shearing ... the list went on.

Now, with a much-reduced sheep flock and our mates across the Tasman facing ongoing drought and devastated sheep numbers, global demand for sheep meat is at an all-time high. What farmers need to know is that global demand has been strong enough to withstand the increase in export volumes in the last 18 months without affecting prices. And that trend is set to continue.

But, for some reason, record farmgate prices and strong global demand don’t offset the basics for some farmers. Regenerating sheep numbers is a long-term game. Sheep are capital and it is unprofitable to see large swings in breeding numbers year in, year out. On the other hand, finishing cattle is an easier gig and if things go sour weather-wise you can always trade your way out of cattle.

With the changing face of farming in New Zealand fast becoming a reality, sheep might fit the bill for some. But we need to jump on that bandwagon fast before Australia has time to rebuild its flocks and reap the rewards of a global market that recognises the qualities of lamb.