It is safe to say that the winter season has been atypical of the normal trends. 

Typically a quieter time for the markets, August in particular was anything but. 

Store and slaughter prices rocketed up as supplies began to dwindle, setting up an even busier start to spring.  

The elephant in the room has been lamb, where a large early kill this year has left processors scrambling for numbers. 

This spike in competition sent schedules upwards by 35-65c/kg through August. 

This resulted in some hefty prices paid on forward-store lambs that can be finished quickly. 

While most of upside has been procurement driven recently, there has been some positive movement in export markets.

There is no denying that the Chinese market has been below par for almost a year, but buyers are beginning to show a bit more interest in securing lamb for the Chinese New Year celebrations in late January 2025. 

The high inventory China had on hand has been chipped into and buyers are now looking to top inventory up for the festive period.

As our supply is limited, orders for the European chilled Christmas trade have been reasonably successful as buyers have had to be competitive to secure lamb.

The United Kingdom market is steady, but sales have been limited there as lamb weights are increasing beyond their desired weight range. 

Australia continues to be our largest competitor and current weather conditions may see their new-season lambs processed around the same time as our new-season lambs come on stream. This will increase supply and potentially make for a harder job for our exporters.

When it comes to the beef market, procurement pressure has been evident on slaughter prices. This has boosted confidence, leading to record high store prices in August. 

But while the domestic market has been hot, export markets have had a quieter period of trading. Procurement pressure has been welcomed by farmers, driving schedules higher, but the lower inventory has meant that New Zealand exporters have less beef available to offer export markets.

There continues to be a lack of demand from Asian markets, with limited sales. 

Although China is purchasing beef, it is in limited quantities, and they are not prepared to open their pockets too wide. 

Japan has been a bit more positive, as the recovering tourism industry has supported some hospitality demand. Export volumes to Japan for the three-month period May-June were nearly 45% stronger than the five-year average at 13,770 tonnes.

As with lamb, Australia continues to pose a risk to the New Zealand beef market, posting record-high exports in July of 130,000 tonnes. Exports eased slightly to 121,800t in August but this is still a record high for the month. 

Australia continues to target the United States market, shipping nearly 80,000t there in the past two months. 

US beef production continues to decline and Australian exports to the US have been progressively increasing since February, buoyed by stronger prices. 

A softening in demand from China has also been a catalyst for a refocus on the US. 

However, more recently, the US has been trying to barter down imported beef prices, which could suggest Australia is accepting lower money to try to offload surplus beef. 

Australia’s national cattle slaughter is tracking 13% ahead of the five-year average from the beginning of the year to the start of August.

This article was written by AgriHQ analyst Sara Hilhorst. Subscribe to AgriHQ reports here.

Feeder calf sales across the country are now well underway and so far, they haven’t disappointed.

Changes to farming systems and farm sales over the past few years have put cattle numbers under pressure. With little surplus cash and the high cost of rearing calves, more rearers had exited the market rather than entered over the past several years. 

The lack of store and finished cattle has finally caught up, and now the need to rebuild cattle numbers has been encouraged by strong returns and positive schedules. This has meant some beef rearers are back in the game this season, as recent margins suggest it could well be worth doing.

We are now nearly a month into the calf sales, and the peak of throughput won’t hit until mid-August. However, early sales show tallies are well ahead of last season. Tallies through North Island sales to August 1 are nearly 1200 ahead. These have been well received by the extra buyers, causing returns to lift.

The national bull kill is a strong focus as estimated slaughter statistics to July 6  show  totals of 430,000-head, season to date. This is a 10% or 50,000-head drop on last season and 73,000-head behind the five-year average, easily making it the largest drop of all the cattle classes this season.

This has increased attention on the Friesian bull calf market. At the early calf sales, Friesian bull calves were trading for up to $300/head at best. These bull calves were likely snaffled up by rearers trying to do both early and late-season calves. 

As the season has progressed, returns have softened slightly, with $150-$210/head more common. But this still trends about $30-$60/head higher year on year, depending on calf condition.

The positive outlook for beef still makes them look pretty good buying. While it is typical for beef schedules to rise from this point of the year, they are averaging 50-80c/kg above five-year averages across the country. This means there is a good margin to be made for beef finishers, on earlier brought cattle. 

And it isn’t only the rearers and finishers making improved money; the current store market is running red-hot too. Record high slaughter prices have flowed on into the saleyards. Limited supply of R2 cattle means prices have soared and traditional R2 steers and bulls through the North Island are commonly trading for $1500-$1800, with up to $2000 paid in some cases. 

Though these are record-high store prices, they are tracking fairly in line relative to schedule lifts. R1 cattle have often been $800-$1200, which is also very strong for this point of the year. 

The strength isn’t only stemming from more market value in schedules. The procurement battle to source cattle is a key driver. Although calf tallies have lifted, and it would seem more will be reared this season, this still may not be enough to fulfill shortages over the coming years. 

Combined, the 2022-23 national beef kill was about 10,000-head behind the five-year average and this was before the current true impacts of fewer calves being reared had hit. Season to July 6 shows that the current national cattle slaughter is 55,600-head behind last season, largely driven by fewer bulls being finished to date this season. Processors and agents don’t believe these are still sitting in paddocks.

According to StatsNZ, the latest figures show that the national breeding cow herd has been on the decline, dropping 7%, or 425,000-head, to the end of June 2023 since 2018. Therefore, it would be safe to assume that over the next year or two the cattle shortage will become more prominent as the effects of fewer calf rearers through 2022 and 2023 come to a head, as well as a decline in calves born.

More: This article was written by AgriHQ analyst Sara Hilhorst. Subscribe to AgriHQ reports here.

In Focus Podcast | Plantain efficacy as nitrate buster questioned

Senior reporter Richard Rennie joins the studio to explain the fuss over plantain. A new scientific study suggests it’s not the nitrate busting weapon we thought it was. There are other species that could do the job for farmers here.

The latest average export value data released has finally delivered some positive news to the lamb and beef markets. 

May’s lamb average export value (AEV) lifted 67/kg month-on-month to $10.42/kg. While this was 66c/kg behind the five-year average for May, it is the closest value to the five-year monthly averages all season and returns to last October’s level.

The increased activity from export markets has flowed through to lifting farmgate prices. This has given processors a little more wriggle room to inject some procurement competition into the system, particularly as slaughter supplies slump. Further upside in export prices will solidify any further increases at the farmgate.

Recent positivity stemming from Japan suggests this market is becoming more competitive for New Zealand lamb, upping its consumption from 440 tonnes in April, to 630t in May. Although China remains our largest lamb market in volume, increasing by 305t in May, this market continues to be weak in terms of value. 

The European Union, United Kingdom and United States have all increased their inquiries and in recent weeks this has translated to further upside in export prices.

Demand for higher yielding, higher priced cuts from the EU and UK is supporting this market, coupled with a tightening lamb supply. 

While Australia continues to pour record volumes of lamb into global markets, New Zealand retains a competitive edge in the EU and UK market because of easier trade access and our smaller carcases better suit the needs of the UK consumers.

NZ exported a total of 35,500t of lamb in May – the highest monthly volume since March 2021. This comprised 30,600t of frozen and 3000t of chilled lamb.The fact that NZ is exporting more but also seeing a corresponding lift in export values suggests the market may be turning a corner.  

Focusing on the EU, NZ exports there jumped to 7000t, up from 5700t in April. Exporters welcomed strong demand for chilled boneless legs. This supported the fourth consecutive month-on-month lift in the chilled AEV to $18.28/kg. 

This sits 52c/kg above the five-year average for May. Frozen demand from the EU lifted 25% in May from April but at an AEV of $9.66/kg, this is still below the five-year average for May of $10.27/kg. 

The positive trend continues in the beef market too. The monthly AEV for May lifted to its highest level since November 2022, to $9.46/kg. 

Broken into chilled and frozen, chilled lifted $1.17/kg to $17.71/kg, and frozen supplies were 70c/kg stronger at $8.90/kg.

In May, volumes shipped to the US lifted substantially to 24,150t – the highest monthly volume dispatched in six years. Just over 18,000t of this was manufacturing beef, a month-on-month increase of 4300t. 

But there has also been strong support for higher-valued, chilled boneless cuts that hit 758t, the largest volume since December 2021. Exponential growth in demand for these from the US this season has supported export pricing and flowed to farmgate prices.

China’s beef purchases are more subdued. New Zealand shipments in May dropped to 14,880t, which sees it slip behind the US as New Zealand’s largest market season to date.

While there is a weakness in volume demanded, there is also a weakness in pricing. China decreased its demand for more expensive chilled cuts in May and turned to cheaper frozen cuts. 

This trend is similar to lamb and while China navigates its weak economic conditions, this is unlikely to change consumer behaviour in a hurry. But thankfully, New Zealand can turn its focus to other markets that are encouraging.

This article was written by AgriHQ analyst Sara Hillhorst. Subscribe to AgriHQ reports here.

In Focus Podcast | Stud bull prices have end of season surge

With our regular host Bryan Gibson still laid low with covid this week, senior journalist Richard Rennie talks to senior journalist Hugh Stringleman.

Stringleman unpacks some of the recent record prices paid for Angus stud bulls at this late point in the selling season, coming after a relatively lacklustre round of stud sales in past weeks.

He also talks in detail about the challenge facing Synlait as it seeks to raise $130 million to pay off loans due in early July.

While red meat markets have reflected market conditions and the season, the wool market has been chugging away steadily in the background. Reduced scouring capacity caused by damage from Cyclone Gabrielle did create some challenges, but the market is beginning to feel a little more normal with the Woolworks Napier scouring plant returning to maximum capacity. 

Wool is flowing through processing chains again and buyers and growers can trade more confidently knowing wool isn’t going to be sat in storage long term.

This year’s prices have been stronger than last year, with crossbred fleeces reaching five-year highs. Fusca’s indicator has the coarse crossbred fleece average at $3.19/kgCL to date this May. This is the strongest it has been since 2019 when the average was $3.11/kgCL. 

But while this is a positive, increased shearing costs have quickly absorbed this lift. Compared to prices received 10 years ago that were consistently mid to late-$4/kgCL, growers still need significantly more from their wool cheque to even cover costs. 

But for now, in an industry that is struggling to find some positivity, this has delivered a renewed sense of enthusiasm.

Approaching winter, the focus has veered away from summer wool and turned to second-shear wools. Pricing for May has been on the rise, notably for very good-style second-shear wool. 

With limited volumes available the market has been in seller’s favour and Fusca’s indicator was at $3.03/kgCL last week. This is 20c/kgCL stronger than in May 2023. Up to $3.44/kgCL was paid on the best fleeces in Napier this month, a recent high. 

This could be a tentative sign that the market is getting back on track, however, the improvement also comes on the back of improved fleece quality, which had been hampered by a poor growing season.

The most recent export data released shows that coarse wool exports (36 micron plus) to China have been increasing, albeit slowly. In March, New Zealand exported 1040t of wool to China, the largest volume since May 2023. 

This has been particularly beneficial for wool prices, as China tends to take the poorer quality fleeces, which in turn has lifted prices for other fleeces. Crossbred oddments are currently at a level rarely seen, commonly at $1.82-$1.92/kgCL.

Across the ditch, a similar lift in confidence is coming through, although the market remains in a tight trading range. Results hit levels not reached for months at the most recent Australian wool auctions held last week. 

The Eastern Market Indicator (Australia’s wool price benchmark) lifted to AU$11.35/kgCL. This indicator isn’t entirely comparable to NZ’s indicators as although it includes 16-32 micron wool, it is weighted more heavily to the finer wool classes, 23 microns or less, which return a higher premium. 

The Australian dollar has also had a strong influence on prices. The AUD has strengthened by over 1% against other major trading currencies. This meant buyers making purchases with USD or Chinese yuan had to pay a higher price to secure wool, which they have been happy to do due to a reduced supply of wool on offer. 

For the third consecutive week, there were fewer than 40,000 bales offered nationally, and demand is beginning to outweigh supply. This is a lift from recent weeks, due to demand outweighing supply, but prices are still AU$1-2/kgCL behind last season.

This article was written by AgriHQ analyst Sara Hilhorst. Subscribe to AgriHQ reports here.

While a lot of the focus on the South Island has been around the trying dry conditions on the east coast and northern parts of the island – and the ideal growing season in Southland – there has been little conversation about what is happening on the Chatham Islands. 

Despite being on the far east, conditions have been far from dry on the islands, and up to 450mm has fallen over the summer months. 

While this sounds like a lot, rain has been at regular and manageable intervals, encouraging plenty of grass growth. This summer and autumn have set feed conditions up well coming into winter. 

However, with the weather capable of going from one extreme to another, it only takes one wintry blast to come through to bring growth to a halt. This has been seen in Southland more recently where the dream run of growth has abruptly slowed with a sudden decrease in temperatures and sunshine hours.

Scheduled maintenance on the Chatham Island ships last year delayed the ability to transport stock for several months and farmers’ patience was tested.

This came as the outlook for the markets, particularly for lambs, was already sounding fairly negative. 

It wasn’t until August that the first lot of lambs could get on the boat, but, despite crossing the water later than they usually would, the stock was in fantastic order. 

The generally forward condition of lambs did mean they earned a premium, but the late offload meant that farmers were a bit behind the eight ball. 

The backlogs from the delay left farmers with a bit of an overflow of numbers coming into the 2023-24 season, which has continued to have flow-on effects even though half the season has already passed. 

There is still plenty of this season’s stock to leave the islands, as the season began later. Thankfully, feed levels can accommodate this for now, but as noted, it only takes one bad turn from Mother Nature to put the pressure back on.

Currently, transport is on a dry dock for inspection and repairs for six weeks. The South Island store cattle and lamb market is currently holding up fairly well but, once again, Chatham Islands’ farmers are itching to get their share of the market before winter subdues trading. 

Typically, cattle are the first to set sail, followed by lambs, and agents anticipate that a large number of weaner calves will be ready to enter the market near the end of May. 

But although the return of sailings is in sight, farmers’ nerves are far from settled. The sooner a large offload of cattle can be worked through, the sooner the lambs can board, and winter stock levels will begin to look more manageable.

Given the current prices of stock and transport, the ever-decreasing returns being made by farmers have many on the islands worried they will be receiving bills rather than cheques when their shipping time comes. 

One thing that could work in farmers’ favour is a delay in mainland cropping farmers entering the store lamb market. 

A slow-growing autumn across most of the mainland has many waiting for some growth before they purchase their winter trade lambs. The timing could line up well for Chatham Islands farmers who are patiently waiting for their run of some good luck.

The halfway point of March has passed, meaning the autumn store cattle market is now well underway. While it is still fairly early days, the second half of the trading season is shaping up to be different from normal. 

In the South Island, it has been a game of two halves. There has been a clear split, with the upper half of the island almost grinding to a halt in trading as dry conditions have put feed levels under pressure. 

Unit-loads of weaners have headed north across the Strait in search of greener pastures as water restrictions and barren paddocks in Canterbury and Marlborough left few alternative outlets. 

There is no meaningful rain forecast in these regions over the next two weeks. Farmers are therefore focusing on making sure the stock they have on hand don’t lose condition, rather than adding extra mouths to paddocks.

Earlier this month, the Southern Man cattle sales featured at Lorneville. These sales are usually the first real gauge of the South Island store cattle autumn market. With a large portion of the buying power from outside regions missing, there was some apprehension as to how the sales would go, given Southland had already taken on a lot of extra cattle when initial El Niño concerns were raised. 

But the ideal conditions have continued and Southland pasture is flourishing, and surprisingly, the market strengthened by about 5c/kg on traditional steers compared with last year. Angus, 400-500kg were commonly $3.05-$3.10/kg. The favourable season did mean cattle were of improved quality and weight, but this isn’t the only reason values were stronger. 

Comparing this season with five-year averages over the same period, the strength in the South Island cattle market is clear. 

Agents have consistently voiced their concerns, as the season has progressed, around the impact of the lack of calves reared. Fewer dairy-beef calves reared limits the options of cattle available, especially for those looking for a cheaper alternative to straight beef breeds. 

The South Island bobby kill lifted 6% in 2023 from 2022, after Fonterra implemented its new bobby kill ruling. That equated to 51,000 fewer calves reared. Therefore, more buyers are having to pay for traditional types and this is keeping pricing firm.

In the South Island, season-to-date, yearling/R2 bulls have eased from an average of $3.25/kg to $2.70/kg. But this remains above the five-year average of $2.53/kg. 

Factoring in that nearly half of the island has buttoned off its buying power due to the dry conditions, the support stems purely from the lack of availability this season. 

Yearling and R2 steers have fallen 30-40c/kg since the beginning of the season to a fairly stable level of $2.80-$3.10/kg. The five-year average shows they normally ease 50-60c/kg season to date. 

When it comes to the North Island, there has been a reasonably solid start to the beef weaner fairs. Rainfall in Waikato and the King Country has meant traditional steers have sold for early $4/kg at around 220-250kg, at the saleyards. 

The supply of R2 cattle available is limited. A lack of R2 bulls, in particular, are struggling to fulfil demand for the reason stated above, and South Island offloads across the Strait, including freight, have been competitive with North Island prices.

As we landed back at Palmerston North Airport on Sunday afternoon on February 18, one word jumped to mind to describe my experience of the Shepherdess Muster – “Wow.” 

When I thought about this word, having processed my experience more, I came to the realization that the wahine of New Zealand are a force to be reckoned with. 

The weekend offered an insight into the lives and journeys of influential women from many different cultures and backgrounds who navigated their way to success.

Typical of the New Zealand transport system, the journey had started with a cancelled flight to Auckland. This meant no flight to Gisborne, which left no alternative but to drive. As someone who suffers from travel sickness, my anxiety levels were increasing. To make matters worse, I still hadn’t yet met the women I would be traveling to Mōtū with. Well, a seven-hour car trip means you get to know strangers pretty quickly and while this wasn’t exactly part of the plan, it was certainly a case of some things are just meant to be.

On arrival, a couple of hours late, it was straight into our “OpShop Frock” attire and to dinner – after having an Instagram pic under the Shepherdess Muster arch, which was dressed in a large array of flowers. 

Looking around over drinks and canapés in the sunshine, it was clear to see that everyone was embracing the dress-up theme. Before any formalities, one trend that was already beginning to shine through was that everybody could be completely themselves with no judgment, which allowed people to quickly settle into the relaxed culture of the weekend.

A roundup of the troops for dinner and a comedy session were next on the agenda and guests were treated to the delightful Michèle A’Court, who had everyone in hysterics at her female-orientated jokes. 

With everyone staying on site there was no limit to alcohol and good times, particularly when the band was introduced, and many danced their way into the next morning.

Saturday morning, it was off to one of the fitness options to make the most of the jam-packed weekend. I was quietly trying to head my way to yoga but unintentionally made eye-contact with the dance instructor. It took a little bit of warming in at 6.30am but it did break the ice with a group of people in the same boat.

The weekend progressed with several workshops and key speakers, all of whom had their own quite different but equally empowering stories of their journeys through life and business. 

The workshop options catered to a variety of needs, depending on what you wanted to get out of the weekend. Many were female and business focused but there were craft, dance, and comedy options available for those who wanted an experience that didn’t work the brain as much. 

If your focus was to rest and relax, beauty and massage appointments were on offer also, as well as wellness caravans and melanoma spot checks. The Shepherdess team nailed the choices and there was something for everyone at every stage of the weekend. 

The weekend was fully catered and when it came to the food there couldn’t possibly be any complaints, with options often described as a “wedding menu”. 

With no cell phone reception, networking, and socialising were forced upon everyone, particularly at seated meals. This allowed mixing and mingling with people from a range of areas. With fewer than 350 guests in attendance, you bumped into one another multiple times over the weekend, which gave you a real sense of belonging.

All in all, this weekend was beyond my expectations. I came away with a new sense of belonging, gratitude, and pride in our rural women and communities. I made a trio of great new friends on my road trip and spoke with people from many different walks of life, who I would never have crossed paths with in normal daily life. 

I can fully recommend this opportunity to anyone who needs a weekend away to refresh and refocus, as well as gaining invaluable business and life education.  Congratulations to everybody who had input to the weekend – you nailed it, and I know many who attended, including myself, will be back.

MORE: Sara Hilhorst is an AgriHQ analyst. She attended the event as a guest of Shepherdess Muster.

The venison market rounded out 2023 in a rather subdued fashion, but still majorly improved on previous years. Despite this, deer numbers are forecast to drop. Logistic issues through the pandemic limited supply available to global markets, and a change of consumer tastes to more accessible proteins dropped demand and hurt pricing.

Venison farmers reconsidered their farming practices and some shied away from deer. Farm sales to forestry and rules and regulations also contributed. Last year, there were at least 20,000 fewer breeding hinds on farms, coming after a similar drop in supply the year prior. 

But, for those that have stuck it out, venison has shown resilience and has emerged from the pandemic in better shape than alternative red meats. Relative to lamb, slaughter pricing is almost $3/kg better. 

Most processors are paying around $8.70/kgCW, excluding premiums. Prices are currently stable and, all things being equal, the expectation is that 2024’s pricing will track similarly to last year’s. However, it is a bit too early to say with confidence. 

The five-year average shows that schedules traditionally drop 60c/kg from the beginning of the season, but this season they have eased only 5-15c/kg. This is partly due to the decreased deer numbers, but a focus on market diversification has also meant that New Zealand isn’t as dependent on seasonal European demand. 

While a drop in supply usually puts upward pressure on pricing, reduced numbers can reduce processing capacity while fixed overheads remain the same. This means that a larger portion of the costs are dispersed over the small numbers and puts a cap on what schedules can offer. 

As the main part of the European chilled season has ended, buyers look to invest in next season’s stock. New season contracts will be released in the latter part of summer, but early on-farm deer sales suggest there is some confidence and positivity.

Strong demand for venison from North America has counteracted European markets that were perhaps not as strong as they usually would be – in particular, North America’s demand for larger cuts of venison. 

Last year, there was no game season in North America and meat companies paid a premium for elk meat. This has supported high prices for elk and wapiti at recent South Island sales, and Tikana Wapiti Stud averaged $10,700 for its wapiti bulls, the highest on their records.

While China is still a fairly new market for NZ venison, this market has had strong growth in the last two to three years. Volumes into the market have stabilised, with China importing similar volumes to the United States.

It is worth noting that although the venison market has made a good recovery from the pandemic, it is not all smooth sailing. As with all exports, the supply chain may come under further pressure from shipping restrictions through the Panama Canal, which continues to suffer from its lowest water level ever.

The export of deer velvet into China continues to be a work in progress. Late last year, China announced it would no longer accept frozen velvet for use in traditional Chinese medicine from next season. As of May 1, all countries exporting velvet will need to send it to China in a dried state, rather than frozen. Deer Industry New Zealand is introducing changes to accommodate the regulations but the pathway into China is now quite complex. 

By value, China is our largest buyer of velvet and related products with a market share ranging between 60% and 80% since the start of 2017, according to StatsNZ. The NZ and Chinese governments are liaising to try to restore access of frozen velvet into China. While the short-term future is uncertain, the long-term goal is that access into China will be clearer and more secure and will add value to the already high-quality product.

This article was written by AgriHQ analyst Sara Hillhorst. Subscribe to AgriHQ reports here.

Increased supplies of lamb and mutton exiting Australia continue to weigh heavily on New Zealand sheep meat returns. 

The key reason is the pricing differential, with Australian product trading at a discount to NZ’s. The NZ average export value (AEV) for mutton came in at $6.11/kg in October. This was a rise from September but still well behind the five-year average of $7.55/kg. Australia’s AEV in September came in at NZ$5.67/kg, a drop from $8.67/kg year on year.

The mutton market has been as unappealing as lamb, due to much larger volumes trading on the global market. Despite this, cull ewes still need to be offloaded. 

As spring lambs begin to come out in larger numbers, ewe processing space will tighten, and schedules will face further downward pressure. 

The NZ sheepmeat market has been largely influenced by Australia this year, and this will continue for the foreseeable future. 

Mutton export volumes from NZ totalled 87,700 tonnes for the 2022-23 season, down 5% from the five-year average. In contrast, record high volumes of mutton have been exported alongside increasing volumes of lamb from Australia. 

From October 2022 to September 2023, Australia exported the highest volume of mutton in AgriHQ’s record for that period – 191,600t, nearly a 22% increase on the five-year average. October exports were the second largest volume this year at 20,100t and there is little slowdown expected through November and December as slaughter and exports typically maintain current levels before easing in the New Year.

While a hard and fast mutton slaughter might be reason to expect a drop in throughput in 2024, Meat and Livestock Australia is forecasting an even larger mutton kill in 2024 – 8.7 million, more than 2023 by 228,000. 

By 2025 it is forecasting the mutton slaughter to reach 9.82 million. This is due to a successful flock rebuild, which has created the largest breeding ewe flock in Australia since 2007.

Currently NZ mutton schedules are averaging around mid-to-late $2/kg, but there is a wide variance depending on location, with some in the deep south of the country only offered early-$2/kg. 

While mutton schedules tend to trough as supply increases at this time of the season, prices are now at historical lows. 

At an average of 60kgLW, and at the current nationwide average mutton schedule of $2.80/kg, this equates to 43-53% of schedule – compared to the 2022-23 season, when ewes were trading at 36-39% of schedule. 

Not surprisingly, given such a low mutton schedule, this suggests that prime ewes are at a premium. But this is procurement-driven as a wet spring has led to a slow start to the new season lamb kill.  

Prime ewes values at the yards are averaging $88 in South Island and $72 in the North Island this month. Last season, some ewes were purchased and then sent out on grazing due to processing backlogs. However, it has been the opposite to date this season, with spaces to fill on chains so the bulk of ewes are heading straight to the processors, although that’s not going to last. 

Currently, El Niño is delivering better than expected rainfall, providing some grace after initial fears that spring was going to be desperately dry, which has allowed farmers a bit more time to consider on-farm decisions. 

Despite that, seasonal trends have shown us that regardless of the weather, lambs will come out in abundance in the next few months. Add in any feed pressures and it will cause an influx of ewes and lambs all at once.

Farmers tend to pay around $40 more for replacement ewes than what they have returned from their culls or sold as prime ewes. This would mean $120-$130 could be an entry point for 2-tooth ewes but this may be overambitious, given the market uncertainty and also the additional challenge of El Niño, should the weather pattern eventuate to a sudden dry spell in the New Year, increasing supply. 

Comparing this with 2016 when mutton schedules and prime ewe returns were similar, early ewe fairs in the North Island sold 2-tooth ewes for $115-$125. Older ewes were sold around $105-$115.

It has been a long time coming – two years, in fact – but smiles are beginning to crack on the faces of those involved in the wool industry. 

New Zealand wool auctions have been trending upwards in both pricing and demand since September and into the opening two weeks of October, although the wool market still has a long way to go to break into profit-making, sustainable levels.

A significant improvement in wool quality is the biggest factor influencing the shift, after two years of very poor coloured fleeces due to wet weather. Spring fleeces are coming in clean and dry and have been rewarded with improved returns. 

September experienced some seasonally high prices for good quality crossbred wool, with the best fleeces often well into mid- to late-$3/kgCL. But the highs have been lifted further since and at the most recent South Island sale, $4/kgCL was broken at the top. 

Fusca’s indicator for coarse crossbred fleeces has risen 49c/kg clean, 16% in the past five weeks, taking it to 3.47/kgCL, a level unheard of since September 2018.

Another driver helping to lift prices is renewed interest from international buyers. There have been some new buyers, creating added competition. 

The export market is still heavily reliant on China, and although there’s talk that this market is improving, this is yet to be seen at the ground level. However, a lot of work is being done on getting wool into other markets, with success. 

Buying is reported to be especially strong out of India. In August, New Zealand exported 1485 tonnes of coarse wool (36 micron plus) to this market, nearly double the volume taken in July, taking them to a 40% market share on this grade of wool.

This has helped the North and South Island to have consistently high clearance rates in the 90% range through spring, with one North Island sale reaching full clearance.

A better exchange rate for sellers since the start of August has also strengthened returns.

The New Zealand average export value for coarse degreased wool is at its highest since January, coming in at $3.78 /kg in August. 

Farmgate wool prices usually settle from around December onwards as summer shearing lifts the volumes trading, and while El Niño sounds like it could deliver some difficult feed conditions, the warm, dry and windy conditions will work in wool’s favour until then.