Despite the dry season forcing many sheep breeders to destock, Merino rams sales have been hot, recording big clearance rates and average prices have lifted across the board.
Yet terminal breed sire sales are not faring as well, and surveys are returning figures indicating Merino ewes to be joined back to meat maternal or terminal sires is the lowest number in seven years, defying what has become ‘normal’ practise for a lot of Australia’s sheep producers.
According to industry experts and data collected, there are a number of factors influencing producers’ choices, not just the continuing tough conditions.
John Settree, Landmark divisional livestock sales coordinator, central NSW, said although the season has forced change to the dynamics of a lot of livestock operations, the encouraging wool market plus big improvements in wool quality is also playing a major roll.
“We are at a 30 year high in the wool industry, but you can’t ignore the fact that Merino stud masters over the last 10 years have improved wool quality and stayed true to their types, and they are being rewarded,” Mr Settree said.
He indicated that Poll Merino rams are now giving terminal sires a run for their money with improved carcase attributes and high growth rates producing a competitive product for the lamb market.
And the return on their fleeces are topping the equation off nicely.
“Not only have Poll Merino studs over the last several years done a terrific job improving the wool quality, but they have also ‘upped the anti’ with their carcase attributes,” Mr Settree said.
“You can turn off a Merino lamb at 12 to 13 months of age and it will return $180 to $210, depending on the market at the time.
“It will then cut you $75 to $90 worth of wool, depending on what micron type and staple length it is – so we are talking about a $280 to $300 product.”
According to Mr Settree, one of the first things sold when things got tough was six to seven year-old Merino ewes.
You can turn off a Merino lamb at 12 to 13 months of age and it will return $180 to $210, depending on the market at the time
- John Settree
“Producers would have normally held on to them to join with a terminal sire,” he said.
“But everyone’s back to core stock. They have culled pretty heavily at the back-end, on the six and seven year-olds, and they have also culled heavily on the early end – the lambs and the weaners.
“So it is the two to four year-old Merino ewes that are left – and producers know they have to buy their Merino rams to join to their breeding ewes.”
What this means is when the drought does break, farmers realise they have a job to do in re building numbers back into their self-replacing flock.
In the most recent wool and sheepmeat survey report by Meat and Livestock Australia (MLA) and Australian Wool Innovation (AWI), which is used as the basis for MLA’s sheep industry projections, some of the numbers show producers were defying the drought, until June at least.
According to the survey report, at the end of June sheep producers were holding 42.85 million head of breeding ewes.
The total number of breeding ewes were at their highest level since the survey began in 2011.
The rise in breeding ewe numbers was driven by a 5.4 per cent increase in the number of Merino ewes compared to last June.
There was also a very interesting development, which looks to be driven by the rise in Merino wool prices.
The Merino for Merino ewe numbers were up 14.5pc, while the Merino for ‘other’ numbers were down 15pc.
This backs Mr Settree’s theory that Merino producers have decided the wool price is good enough to forsake joining to meat maternal or terminal sires and are swinging back to breeding Merinos.
The 7.82 million Merino ewes to be joined to ‘other rams’ is the lowest number since 2011.
This will no doubt have impacts down the track on supplies of first-cross ewes and crossbred lambs.
“People are still aware that their production still has to keep humming through to the autumn when they are lambing,” Mr Settree said.
“If the drought breaks happy days, if it doesn’t then there are some questions to be asked then.”
Mr Settree said some producers are now looking at increasing wether numbers.
“It was only a few years ago that you would only cut $35 worth of wool off a sheep and it was costing you $10 in production, shearing and ongoing costs,” he said.
“But now, talk to those producers that are performing six and eight month shearings, they cut $65 to $70 of wool per sheep, but twice a year.
“It doesn’t take much to have a sheep that will cut you $80 worth of wool.”