Sheep producers have been urged to evaluate their flock selling strategies carefully to ensure the long term profitability and viability of their enterprise and the industry is not eroded by short term opportunities to cash in on high saleyard prices.
Sheep prices have increased across all classes in recent months, fuelled by a shortage of stock in the east and the resumption of the live export trade.
Department of Primary Industries and Regional Development analysis shows a record 239,600 sheep and lambs were transferred east from Western Australia in the first two months of 2020, of which 61 per cent (145,400 head) were lambs and 39 per cent (94,100hd) were adult sheep. (See graph.)
Department senior development officer Mandy Curnow warned growers to think carefully about the impact the sale of young breeding stock would have on future flock profitability.
Ms Curnow urged growers to consider the long term ramifications of selling off breeding stock on both their flock and the industry’s ability to satisfy ongoing local demand.
“While prices are currently strong across all classes, it is important for producers to consider the impact selling breeding stock will have on their own flock’s current and future profitability if the replacement stock is reduced,” she said.
“Key considerations will be whether or not to sell off young, maiden ewes or proven performers that are essential to maintain the value of the flock in the future.”
The department’s ‘Implications of management decisions on the WA sheep flock in response to changing markets’ [1] 2019 report, found the class – rather than the number – of sheep transferred east had a larger impact on the future volume of sheepmeat and wool produced.
“The scenario modelling found when a greater proportion of ewes to lambs were transferred east, the size of the WA sheep flock declined over a 10 year period, which could place pressure on the industry’s ability to supply meat and wool customers,” Ms Curnow said.
“The challenge for producers is to maintain current business viability, while at the same time retaining enough breeding ewes to ensure continued turnoff and future flock profitability.”
The department’s Sheep Flock Composition Calculator [2] is a new tool that can assist producers to compare selling scenarios and model the consequences of selling or retaining different age classes of ewes over six years.
“Producers can use the calculator to evaluate the impact of changes on the age structure of the breeding flock, the potential number of lambs at a given weaning percentage, the culling or classing percentage and the proportion of wethers retained,” Ms Curnow said.
“This information will give producers a clear understanding of the impact of short and long term consequences of their decisions on their breeding objectives, production strategies and finances.”
Modelling by respected economic analyst John Young, commissioned by the department, has shown that it is highly profitable to supplementary feed ewes – despite current high costs.
“The ‘Breeding Ewes are Worth Feeding’ [3] report concludes that farmers and consultants can be confident that it is profitable to supplementary feed their breeding flock to ensure successful lambing and to give the highest priority ewes, twinners, the best feed and management during pregnancy,” Ms Curnow said.
“The modelling shows that twin bearing ewes are $60 per head more profitable than single bearing ewes, which are $60 more valuable than dry ewes.
“Twin bearing Merino ewes mated to Merino rams were valued at $280, while twin bearing Merino ewes mated to a terminal sire were worth $320 each.
“These results demonstrate how important it is to make the right selling and retaining decisions and to use tools like the Sheep Flock Composition Calculator to develop profitable flock management strategies.”
The department’s Season 2020 [4] webpage has a new article ‘Making Good Sheep Management Decisions – summer and autumn’ [5], which maps out flock nutrition priorities for the next three months.
“It’s important for producers to have a clear understanding of the feed requirements for each class of their flock, while access to quality water could be a challenge for some producers in dry areas,” Ms Curnow said.
“There is also a good opportunity to undertake pregnancy scanning to identify twinning ewes so they can be managed separately to optimise lamb survival, as well as to identify dry ewes that could be sold off.”
The Season 2020 webpage [4] has a wealth of updated information to assist sheep producers navigate the months ahead, including feed and water budgeting, a supplementary feed calculator for pregnant and lactating ewes, pregnancy scanning and nutrition.
[6]Media contacts:
Jodie Thomson/Megan Broad, media liaison
+61 (0)8 9368 3937