Mecardo Analysis - Survey results defying the drought
- By: "Farm Tender" News
- Ag Tech News
- Oct 23, 2018
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By Angus Brown | Source: MLA, AWI.
We’ve had plenty to write about in sheep and lamb markets lately. Hence it has taken a couple of weeks to take a look at the June MLA and AWI wool and sheepmeat survey report. This survey is used as the basis for Meat and Livestock Australia’s (MLA) sheep industry projections and some of the numbers show producers were defying the drought, until June at least.
The first interesting figure is the number of breeding ewes on hand. According to the survey report, at the end of June sheep producers were holding 42.85 million head of breeding ewes. Figure 1 shows that 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% increase in the number of Merino ewes compared to last June. There was a very interesting development, which looks to be driven by the rise in Merino wool prices. The Merino for Merino ewe numbers were up 14.5%, while the Merino for ‘other’ numbers were down 15%.
To state the obvious, 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 and will have impacts down the track on supplies of first cross ewes and crossbred lambs.
We were surprised to see that marking rates for lambs born in the four months to the end of June were only down marginally. Merino marking rates were at a quite reasonable 84%, down from 89% last year. ‘Other’ ewe marking rates were up, at 97% compared to 94% last year.
The number of ewes which were lambed down in the four months to June was down, way down. The survey report showed 7.9 million ewes lambed, down 28% on June-17, which led to a 30% fall in lambs marked (Figure 2). Merinos were more heavily affected, with 1.7 million (down 32%) fewer lambs, and ‘Others’ being down 1.27 million head (27%).
Key points
* The MLA/AWI wool and sheepmeat survey report shows drought had little impact on ewe flock to June.
* Stronger wool prices have seen more Merino ewes joined back to Merino rams
* There were 30% fewer lambs born in the four months to June compared to last year, and we’ve already seen the impact on supply.
What does this mean?
It comes as no surprise to see fewer lambs marked in the four months to June, but we thought it was going to be via lower marking rates, not a heavy fall in ewes lambed. The drought may have seen many ewes sold early, rather than being lambed down. Having said that, the June-17 numbers were a bit of an aberration, with this year’s number closer to the long-term average.
The longer-term impacts of more Merino ewes being joined to Merino rams are likely to bolster the wool growing flock and help support wool supply. It will, however, see some negative impacts on lamb supply this year and into the future. As always, negative supply impacts are good for prices.
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