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’ 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 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.