Analyst Intel

25 October 2019

ACROSS THE RAILS | Prime hogget volume spikes in the South Island

By Suz Bremner Suz Bremner

It is a busy time at the South Island sheep sales as the last rush to get prime hoggets offloaded produced a spike in volume. September and October are busy months, though the season and schedule prices dictate which is more hectic, and this year October is winning.

While processors are checking teeth and discounting any that have cut them, the need to fill space and strong overseas demand have pushed schedules to $8.40-$8.65/kg CW with some murmurs of it still possibly pushing higher. Good lamb survival has seen few cull ewes coming forward to fill space and tight feed levels mean new season lambs are still a way off. So that has put the focus directly on the prime hoggets still available and sellers are reaping the reward.

Temuka has had higher-than-normal volume over the last two weeks with five-year averages exceeded by 800-1000 head at each. PGG Wrightson agent Jonty Hyslop said “Processor space is readily available but it is that very competition that is keeping prices up at the yards and therefore attracting them to auction. Even a North Island processing company has been unbeatable in the past few weeks on very heavy hoggets, which are usually dumped into the yards and heavily discounted due to being penalised at the processors. But too many are now cutting their teeth and the edge is starting to fray.” Hyslop said it has been a fantastic season but he does wonder what will happen if and when China pulls back its demand “We have a dwindling supply of sheep in general in New Zealand, therefore, there is less product available for export. But with a large proportion of that now heading to just one purchaser, that leaves us in a very vulnerable position.”

At Coalgate a few weeks back prime hogget volume was up 1700 on the five-year average as more farmers cottoned on to the fact potential returns were very high. Close to 60% of those offered sold for $200-$242 while 400 new season lambs made $160-$224.