Returns for ewes with lambs-at-foot have certainly improved since last year but a weak mutton price may be the difference in prices not rebounding back to 2022 levels. 

There are still many places across the country in the thick of lambing. For the North Island regions that are through it now, reports of survival have been mostly positive and demand for the first early-borns to hit the market has been surprisingly good.  

The chaotic neutral weather pattern that has dominated through winter and now spring has turned out to be rather favorable for most new-season lambs. The right balance of just enough sun on backs and well-timed rain has meant many regions with a lot of light lambs on the ground are better set-up for growth. 

As the lambing season continues, the combination of increased multiples, good survival rates, and hungry lambs has meant there has been an early uptick of ewes with lambs-at-foot trading in the paddock. This has eased prices $10 or so in the past fortnight to around $90-$100. 

It could be expected that the market will continue to be tested as the season progresses. Despite this, a finished lamb price on the rise has contributed to a more positive outlook for traders. There are many regular buyers who are also reporting better confidence in feed and faster growth rates, driving demand for ewes and lambs out of the hole they were stuck in last year.

Tightening feed budgets have also increased the volume of ewes with lambs-at-foot in the saleyards, where farmers are seizing the opportunity to lighten the load, supported by firmer returns. 

Last year, supply at Stortford Lodge didn’t build until September 13, and even then demand was soft as the only pens not passed in fetched $60-$85 all counted. This year’s first sale featuring 200 ewes and lambs took place on August 21 when the better pens with older lambs fetched $101 to $107 all counted, while those with lighter-condition ewes or smaller lambs sold for $81 to $95.

At Feilding on September 13, 286 ewes and lambs were yarded. Better pens fetched $101-$116 all counted while the rest traded at $81-$97. The following week at Stortford Lodge, there was a clear preference for a larger docked lamb as pens that fitted the bill fetched $103-$108 while pens of smaller lambs made $80-$90. 

Overall in the yards this year, ewes with lambs-at-foot at Stortford Lodge and Feilding are averaging $90 and $88 respectively, an improvement from last year when averages were $69 and $65. However, still less than previous years as, from 2018 through to 2022, averages were in the range of $96-$123. 

This will most likely be related to the dynamic of the current mutton price. The five-year average mutton price for the month of September is $5.29/kg. Mutton schedules are currently operating near an average of $3.50/kg, the highest it has been all year. However, this is an improvement on this time last year when the mutton price was declining to around $3.30/kg. Almost all New Zealand mutton is exported to China, which is currently showing weak demand for most imported commodities including red meat. 

More: This article was written by AgriHQ analyst Alex Coddington. Subscribe to AgriHQ reports here.

In Focus Podcast | Sheep outlook: the future of our flock

Sheep farmers are doing it tough right now, with farmgate returns dropping back after a few good years and input costs rising. Add to that the march of pine trees across the land, and there’s talk of an existential crisis. Bryan asked AgriHQ senior analyst Mel Croad to give him the lay of the land and asked her what the sector needed to do to find prosperity again.

North Island slaughter rates typically don’t bottom out until September, but this year supply has been tight since mid-June. With processors under pressure to meet orders, they’ve been increasing farmgate returns for prime cattle, and store market prices for yearling cattle have been lifting in tandem.

In the past six weeks, average paddock prices for heavy R1 steers in the North Island have risen from $3.80/kg to $4.20/kg, while prime steer prices have increased from $6.40/kg to $7.00/kg. 

This has kept the store value of R1 steers at a normal range of 59-60% of the schedule. Though current cattle values are high, confidence in the market has previously pushed yearling steer values closer to 65%.

Milder winter conditions and early autumn destocking have intensified demand, making saleyards a preferred selling option. Most store trading now occurs at auction, above paddock values. The heat of the market has been a good incentive for some to tidy up numbers so while the volume of cattle in yards has been increasing through August, quality hasn’t quite been comparable to previous years in regions with early offloads and dry conditions.

R1 steers at Stortford Lodge were on average 40kg lighter than last year, Rangiuru 25kg lighter, and Feilding 12kg lighter. Prices at these saleyards are up 60-80c/kg compared to last year. Conversely, yearling steers at Wellsford were 43kg heavier on average, Taranaki 12kg heavier, and Matawhero 18kg heavier, with prices up 30c/kg to 68c/kg. Frankton saw the smallest weight change but the largest price increase, up 87c/kg from last year.

For some, the lifts to the store market have been too hot, too fast. Feilding has been in a league of its own when it comes to yearlings, with an average price this month of $4.44/kg, or 63% of the schedule, followed by Stortford and Taranaki at $4.36-$4.37/kg, and Wellsford at $4.00/kg. 

The astounding per-head prices required to secure replacement cattle now have a fair amount of people holding on to what they have, as long as weather conditions allow, only adding to market supply pressures.

Where to next for store cattle prices will be largely dependent on domestic supply moving forward. With so much pressure still on the procurement of finished cattle, there is no doubt processors will be looking to balance out losses when numbers better match capacity. In other words, current store cattle prices are relatively in line with schedules but don’t match up with current market signals. 

Although the United States remains hungry for beef, a strong presence in this market from Australia and Brazil is rectifying these shortages. Economic downturn has put China’s demand for beef on the back burner, while its own low domestic meat prices have kept demand from our once-largest consumer below average all year. 

With high spring prices brought forward, there is an increased risk of an early change in direction if and when numbers pick up. Assuming store market values stay in line with farmgate prices, there is a likelihood of store cattle values falling almost as quickly as they rose.  

This month’s North Island Livestock Outlook report forecasts prime steer schedules to drop 40c/kg more between October and January than it did the same period last year.  For more in-depth analysis on global red meat markets and farmgate price projections for the next six months, sign up to Livestock Outlook, August issue out now. Visit agrihq.co.nz/livestock-reports

Returns for cattle have been strong this year compared to last, and the values on cows have been no exception.

Analysing saleyard data on vetted-in-calf (VIC) beef cows has shown values in the North Island to be mostly higher than year-ago levels, especially dependent on which saleyard you are buying from. 

Robust returns in the yards, a lifted market for finished prime cows, and varying levels of feed between regions have pulled significantly more VIC beef cows to auction this year. 

In the South Island, different seasonal circumstances have made VIC beef cows better buying, although there were fewer through these yards.  

Demand for cows has been strong through the association of good international demand for beef, especially imported 90CL (chemical lean) beef into the United States. Their limited availability of finished cows has led them to import immense quantities from South America, Australia and New Zealand. 

The prolonged time expected for the US to rebuild its cow herd provides confidence that demand for beef should remain strong for some time. 

There have been almost 800 more VIC beef cows through the yards this year in the North Island from March to June, and over 300 fewer in the South. Overall, an additional 400 VIC beef cows were sold through the yards nationally compared to 2023. Looking back on previous years, a five-year average throughput would include results from 2020, when saleyards were essentially shut down. 

The throughput of VIC beef cows nationally in 2018 and 2019 was comfortably over 4000 head from March to June each year. In 2020 the number dropped drastically and has been recovering year by year ever since.

Stortford Lodge held the first of the in-calf cow fairs in March. Large consignments of well-bred Angus drew a big crowd of return buyers, who held the fair to a similar level of returns as the previous year. 

Since then, more than 1200 beef cows have been sold at Stortford Lodge, around 160 more than in 2023, with the average return increasing 11c/kg to $2.48/kg. 

Results for VIC beef cows at Feilding were very similar. Over 200 more were on offer this year compared to last, including the 445 sold at the in-calf cow fair in May. From March to June, almost 700 in-calf beef cows were sold at Feilding, with the average value increasing 11c/kg to $2.42/kg.

Historically, the Frankton saleyards have posted a more modest throughput at a lower price. Since 2008, this has looked like around 50-150 beef cows at an average return of around $2.00-$2.05/kg – understandably, due to dairy and dairy-beef cows being the more available composition in this region. 

However, this year the number of VIC beef cows sold through these yards has increased from 87 to 273, while the average price lifted 47c/kg, from $2.04/kg to $2.51/kg, surpassing results from Stortford Lodge. 

Between the South Island saleyards, Coalgate, and Temuka, only one held an in-calf cow fair at the height of the dry in autumn. The VIC cows on offer were mostly Angus and Shorthorn, making $2.10-$2.18/kg. This set the tone for an average return for the year of $2.16/kg, 12c/kg back on last year’s results through the same period. 

Coalgate had significantly fewer in-calf beef cows through the yards without a fair this year but will most likely see more VIC beef cows through July.

It’s not always easy for sheep and beef farmers to focus on the positives when the biggest factors affecting their bottom line are beyond their control.  

In recent years, a long list of contributing factors has seen input costs skyrocket. Last year, on-farm inflation was over 16%, the highest it has ever been since the 1980s. Meanwhile, output returns have struggled against strong headwinds. Despite this, the low buy-in price and improved spring forecast schedule offer some positive elements to this season’s market dynamic for traders and finishers. 

Unfortunately, the dire bottom lines for farms in recent years have already altered land use. The declining beef supply and plummeting national flock have become a problem for processors. 

For lamb, further capacity shake-ups are now necessary for processing a very low remaining kill through winter.

Although operating costs are still high, the cost of buying stock has been relatively low, especially store lambs. Drier than normal conditions in our main sheep-producing regions have doubled down on restricting demand. 

The average weights of lambs through Feilding and Stortford Lodge show that hill-country lambs have had a tough run this year, while a general lack of feed heading into winter has kept the store market in check. 

The average weight for male lambs through the Feilding saleyards in May was the lowest it’s been since 2008 at 32.6kg. Similarly, ewe lambs and weights for lambs through Stortford Lodge are all below the five-year average. It’s not surprising that the value of store lambs has failed to lift in tandem with recent schedule gains. 

Farmgate returns for lamb are still far from generating excitement in farming them. Despite the below-average forecast spring lamb return, the function of a low buy-in price does reflect better confidence in an improved margin for traders this year. 

The current buy-in price for store lambs relative to the predicted spring schedule has fallen from 52.1% last year in the North Island to 37.3% – a marginal change of almost 15%. This is the lowest this figure has been since 2013 when most of the North Island was in severe drought. 

Last year, male lambs were bought in April at an average price of $3.45/kg, anticipating a $9/kg spring schedule. For the first time in 10 years, the spring price turned out to be less than it was in April at $7/kg. 

This year, the evident lack of prime lambs has warranted expectations for processors to continue to lift the schedule to just under $7/kg come spring. This means that male lambs purchased this month for $2.60/kg are expected to generate the highest margin percentage in the past five years. 

There is a similar dynamic in play for beef, especially in the South Island, where feed restrictions are restricting the ability to trade through winter. The New Zealand steer and heifer slaughter statistics show from October to mid-May, 816,554 head have been processed, an 11% increase on the five-year average. 

Now that we’ve reached the off-season, prime numbers are especially tight. The current spring forecast price for prime beef in September/October this year in the North Island is close to 40c/kg above last year’s spring price. In the South Island, the predicted schedule for spring could be 20-30c/kg above last year.

In contrast, the current buy-in price for R2 steers and heifers is roughly 5c/kg below year-ago levels in the North Island and 60c/kg less in the South.  This would make the current R2 steer and heifer price only 47% of the spring schedule, compared to 52% last year. In the South Island, the current R2 steer and heifer price is only 43% of the predicted returns in spring, below the five-year average of 45%. 

Based on these forecasts, and much like with lamb, there are opportunities to be had. 

Grass growth has been fuelling better demand for stock out of Waikato, as well as a competitive schedule from processors – and the proof is in the elevated returns at the weekly Frankton sales. 

Frankton presents two large cattle sales each week. The Tuesday sale is hosted by PGG Wrightson and supported by the online auction platform bidr, while the Wednesday store sale is run by New Zealand Farmers Livestock (NZFL) and the online auction platform MyLivestock. Both sales post similar throughput of prime and store cattle. 

In stark contrast to the current dry conditions in the southeast and last year’s sodden paddocks, this year’s grass market lifted the average price across all stock classes at these sales. Prices are currently higher than year-ago levels and higher than most other saleyards in the North Island. 

Compared to results out of Feilding, the average price for R2 Hereford-Friesian steers and heifers has been up by 10-14c/kg this month. Weaner Friesian bulls have been returning an additional 24c/kg.

At this week’s PGG Wrightson sale at Frankton, 507 store and 194 prime cattle were up for grabs. Over 60% of the store offerings were R1 Friesian bulls that weighed 274-321kg. 

The growing per-head price of older Friesian bulls and the lack of supply have turned a lot of buyers towards the market for younger bulls with plenty of weight, making this class a popular option at the yards. 

The sizeable supply was easily absorbed by strong demand as they returned $980-$1095. Boner Friesian cows made up most of the prime sale. Better presented types weighing 471-807kg topped the section at $1.96-$2.06/kg. 

At Wednesday’s NZFL sale, 156 prime and 183 store cattle were yarded. The top R2 dairy-beef steers made $3.04-3.10/kg, and weaner/R1 dairy-beef heifers, 158-227kg, returned $550-$730. Prime heifers, 456-536kg, lifted and most sold for $2.92-$3.03/kg. Boner Friesian and Friesian-cross cows, 403-533kg, made $1.80-$2.06/kg. 

The autumn cull cow offload often stretches from March to May before numbers start to seasonally decline into June. It’s well known that through this period, cattle space at processing plants is usually hard to come by. Especially when you throw in reduced production weeks around Easter and Anzac Day. 

But in a strange turn of events, this year there have been very few accounts of  space restrictions at processing plants. Which raises the question – where are all the cows?

The cumulative South Island cow kill is down 8.2% compared to last season. The North is fairly steady, up 3.6%. Season to date (to April 13), the national cow slaughter stands at 437,878 head, only 0.9% less than last year.

The exodus from dairy farming of a lot of smaller players has played a large part in the apparent lack of cows seen at the end of their life cycle. This is most likely a factor in this year’s unusual dynamic in procurement, bucking a few price trends in the saleyard and the schedule. 

The AgriHQ procurement indicator for cows usually hits its lowest level around this time of year, before climbing upward into July. This year, our procurement indicator has been stable since mid-April.

Better conditions to keep cows on farm in the North Island’s main dairy regions kept a fair few cattle away from the processors. The favourable summer growth period left a lot of rough tucker on farm after summer, making this class an attractive option for grazing. 

An El Niño autumn has kept cows dry underfoot right through until May. Not to mention the improved conception rates for dairy cows this season and the elevated milk price made it a no-brainer for dairy farmers to keep milking as long as possible.

This has applied some of the extra pressure to keep meat on hooks from a processing perspective, even more so when you consider the favourable export market conditions out of the United States. 

The North Island cow slaughter price has held close to $4/kg since February. In the North Island this week, the slaughter price is 20c/kg above year-ago levels and over 30c/kg above the five-year average. 

In the South Island, the cow slaughter price is fairly steady on year-ago levels and only a few cents higher than the five-year average at $3.30/kg.

In the North Island saleyards, the bulk of the cull cow sales are shared between Feilding and Frankton. Both saleyards sold close to 6900 boner cows in 2023, with numbers increasing slightly this year. Processors have snapped up most of these cows, though grazing interest kept prices competitive.

Prices for cull Friesian cows at Frankton have been consistently higher than year-ago levels for the past 10 weeks. 

In April, Friesian cows returned a high of $1.93/kg. At Feilding, prices have also held above year-ago levels before easing to $1.85/kg this week, but this was still 10c/kg higher than this time last year. 

In the South, autumn has been much harsher for farmers. This week Temuka saleyards hit capacity with more than 1100 cows offered. Most Friesian types made $1.55-$1.65/kg, meeting year-ago levels. 

In 2023, over 13,000 cows were sold at Temuka. To date this year, Temuka has already seen a 12% increase of throughput. 

Prices for Friesian cows at Temuka have been almost identical to last year’s price trends, aside from a prolonged elevation above $2/kg through February, when processors were handing out spot premiums to maintain the flow of cows. 

This article was written by AgriHQ analyst Alex Coddington. Subscribe to AgriHQ reports here.

Temuka saleyards finished April on a positive note as prices at the weekly sheep and prime cattle sale lifted across the board. 

Vendors were pleased to see prices firm and buyers had plenty of choice in the 759-head yarding of cattle. 

Following a short work week, processing space in the South Island seems to be flowing without any backlog, which encouraged strong demand from a regular gallery of buyers. 

The prime traditional heifer average took a significant jump of 19c/kg from the previous sale, to $2.74/kg. Several lines of Charolais and Hereford-Friesian steers were able to reach $2.94-$2.95/kg and traditional lines averaged $2.90/kg.

For the fifth consecutive week, cull cow throughput exceeded year-ago levels, though the market continued to firm and Friesian cows lifted 16c/kg to a $1.66/kg average. Hereford-Friesian cows, 608kg, made $2.95/kg. 

Big volumes of beef cows are yet to be seen. However, the competition for the limited yarding had most between 580-737kg return an average of $2.02/kg. 

The large yarding of lambs at Temuka also returned some great results. Although grass growth in the region is stunted by the prevailing dryness, recent rain has been a saving grace for recently planted new grass. This brought with it a small upside to demand for store lambs. 

There was a clear preference from buyers for shorn, sex-drafted lambs, and competition for these types pushed the top pen of males to $120. 

However, a heavier pen of ewe lambs from the same Ashburton vendor was able to reach $125. Store lambs averaged $82.40, which was up $2 on the previous week. 

The prime sheep yarding was minimal following the rush offload of lambs and ewes earlier in the season. Prime ewes, lambs, and rams totalled just over 650-head. Most lambs made $100-$136, on par with the previous sale. The small yarding of ewes made $60-$87.

On Monday April 15, Wellsford held a supplementary weaner steer & bull fair. The fantastic results from their first weaner sale in March reflected the strength in demand for weaner calves this season so the follow-up sale this month came with high expectations for success. 

Wellsford and its surrounding areas have been one of the better parts of the North Island for feed cover, making for a lot of local competition at this sale.

However, the dryness prevailing over much of the east coast, Northland and the Wellington region has dampened the general appetite for young cattle. Many buyers from the King Country have been busy absorbing the large supply of weaners hailing from these drier regions, forcing some downward pressure on prices. 

Weaner traditional steers were mostly Angus, and were lighter than the traditional steers offered at last month’s steer and bull fair. The top cut of weaner Angus steers, 276-334kg, made $860-$1040. On average, the traditional steers weighed 230kg and made $770 or $3.34/kg.

Weaner Dairy-beef steers close to 170kg returned $770 last month; at this sale  these types eased 45c/kg and returned a per head price of $705. Purebred weaner Hereford bulls, 226-236kg, made $756-$770 or $3.26-$3.38/kg. Weaner Friesian bulls, 152-164kg, made $670-$710. This has eased since last month by $30-$40 per head.

This article was written by AgriHQ analyst Alex Coddington. Subscribe to AgriHQ reports here.

On Thursday, April 4, Longfords Estate in Rotorua hosted its second annual on-farm sale, facilitated by the livestock agent company Hazlett. 

This picturesque 810 hectare farm, under family ownership since 1937, boasts 240ha of drystock sheep and cattle grazing pasture, alongside 200ha of native bush nestled between Lake Okareka and Lake Tarawera.

The shift in farm policy towards a weaner-to-18-month cattle trade rendered the property an ideal candidate for an on-farm sale. 

The inclusion of home-bred lambs from several vendors diversified the pool of buyers attending the sale, offering the sellers an opportunity to reduce numbers before winter. 

Expectations were high, following the impressive results of the 2023 sale, and the returns did not disappoint.

The turnout of attendees on the day primarily comprised eager returning buyers. Strong interest from locals and online via bidr contributed to securing fantastic results for cattle. 

The depth of buyer support also realised a great result for the lambs on offer despite challenging market conditions.

In-calf Hereford cows found new homes in the Manawatū region, fetching $1310. The 230 R2 Angus steers fetched favourable results, supported by a robust market and reflective of Longfords’ reputation for quality cattle. Most of these steers remained relatively local, shifting to the Waikato and Bay of Plenty areas.

The top-tier R2 Angus cattle, estimated to weigh close to 510kg, commanded a per head price of $1600. The remaining steers fetched between $1250 and $1355, averaging around $3.20/kg. 

The day’s offering included over 2300 lambs with approximately 300 categorised as heavier prime types, which fetched prices up to $123. A total of 1139 terminal-cross males sold for $79 to $103, approximately $2.50/kg, while 769 ewe lambs realised prices ranging from $75 to $85.

As the days become shorter, the supply of lambs entering the store market continues to expand. Unfortunately, demand for lambs in recent weeks has been close to non-existent and the push for store lambs to hold their value has diminished, despite a relentless battle by vendors.

The changing season marks the time of year to assess feed capacity and start offloading in accordance with winter stocking rates. The influx of store lambs to market is always expected to cause some price downside. However, last year things played out a little differently and store lambs had been holding strong relative to schedule.

This time last year the country was flush with feed. Cooler temperatures had slowed growth but there was an apparent lack of any sign of drought across North Island regions. While the market twelve months ago may have been oversupplied with lambs, there was enough demand to absorb the seasonal increase as buyers banked on a strong winter return. As a result, heavy store male lambs had been steady through the opening months of 2023, trading at $3.40/kg in the North Island, or around 47-48% of schedule.

This year, autumn dryness is prevailing across much of the North Island, the exception being parts of the King Country and Waikato that still seem comfortable with feed. 

On the west coast of Northland, most of Wairarapa and Wellington, the weather has been very dry and most farmers are short of feed. Last week 32kg male lambs quoted at $2.50/kg ceased to generate any interest, causing further downside to a new level of $2.45/kg. This week’s AgriHQ lamb price indicator of $6.10/kg would put these lambs at 40% of schedule. In a year of autumn drought, this kind of percentage is to be expected. The last time areas in the North Island experienced this kind of autumn, the country was in lockdown, making it hard to compare the outlook. However, as a reference to this time in 2020, 32kg male lambs were trading for $2.80/kg against a lamb slaughter price of $7/kg, equating to around 40% of the schedule.

This time last year slaughter schedules for lamb were lifting in both islands, and buyer confidence was well supported by the expectations of active Chinese demand as they emerged from lockdown. Prior to last year the average lift in farmgate prices between May and September was $1.10-$1.15/kg. 

Last year farmgate prices fell from autumn to spring – a first in 11 years, as China demand recoiled. This year export demand from China has flatlined with little expectation of any lift in demand or price in the short-term. However, not all is lost with our traditional markets stepping up to the plate, providing a glimpse of optimism.

Last year the steady appetite for store lambs and an expected firm outlook on slaughter returns kept prices for lamb on the stronger side. The catch to the dynamic was the difficulty of sourcing a good deal on a line of “cheap” store lambs. On the Thursday before Easter in Feilding last year, 2500 lambs weighing on average 35.5kg were auctioned at an average price of $3.42/kg. Similarly, at Stortford Lodge, there were over 5000 lambs yarded. Overall, lambs averaged $3.41/kg at an average weight of 36kg. Last week yard activity was close to zero. Feilding cancelled at late notice, while Stortford Lodge sold only 900 lambs with 30-40kg males returning $2.36-$2.53/kg. 

In stark contrast to last year, the window of opportunity is seemingly open for winter traders to generate a margin – if they have the means to hold lambs over winter. 

Hence the period of weakness to this market while most of the North Island waits for more rain. The forecast for slaughter price is for there to be some upside but at this point it’s nearer the lower end of historical levels, sitting just shy of $1/kg to September. This would make current 32kg male lambs at $2.45/kg relatively good buying based on a firming slaughter market in the months ahead.

This article was written by AgriHQ analyst Alex Coddington. Subscribe to AgriHQ reports here.