Sheep feeding pay-off depends on timely rain

Sheep feeding pay-off depends on timely rain

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FIGURE 3: National mutton indicator. The red line indicates the break-even price of a 22 kilogram cwt sheep if feeding maintenance increases from now, against the National Mutton Indicator.

FIGURE 3: National mutton indicator. The red line indicates the break-even price of a 22 kilogram cwt sheep if feeding maintenance increases from now, against the National Mutton Indicator.

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The Stock Take: Mecardo's Matt Dalgleishm analyses the cost of feeding sheep as farmers face uncertain weather forecast.

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It’s all very well to say sheep are too cheap at the moment and prices are due to rise, but there are obviously costs in carrying sheep through the autumn in the hope of a timely break and grass growth before winter sets in.  

With grain sitting at around $400 a tonne and pasture hay just as expensive on an energy basis, feeding is a lot more expensive than in previous years.

However, wool and lambs are priced very well, so there is some pay-off.

RELATED: Ewes sell for $310 state record

The estimated cost of feeding the full energy requirement to a dry Merino ewe for 90 days at $390 a tonne is $26.

This cost is currently around 20 to 25 per cent of the value of the ewe.

However, with all wool under 24 micron priced well over $21 clean a kilo, most Merino’s are cutting over $60 worth of wool.

Feed rations get more expensive with pregnant and lactating ewes. Anyone feeding through the autumn would be banking on rain and having pasture to feed ewes in late pregnancy and for lambing.  

Meat breeds are generally heavier and eat more, they therefore cost more to maintain.

Depending on the type of sheep, the wool values of meat breeds are lower than Merinos or insignificant.

However, spending $35 feeding a crossbred sheep, which produces 1.3 store lambs at $80 a head still offers a good pay-off.

What does it mean?

There will be some very good value in feeding Merinos and breeding ewes in the event that an autumn break arrives in a timely fashion.  

There will be a rise in mutton prices and the premium for breeding sheep will also widen. This will offer a handsome pay-off.

However, there is also risk. If it doesn’t rain, price gains for mutton aren’t going to compensate for feeding costs.

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