By Beckie Wilson
Wairarapa sheep and beef farmers are enjoying a boost in profits this season thanks to improved pasture growth and better lamb prices.
While the “big upswing” in prices has been welcomed by Wairarapa Federated Farmers meat and fibre chairman William Beetham, he is cautious of what it may hold for the future.
Up until now, farmers had been seeing “very buoyant pricing” across the sheep and beef sectors, apart from wool, due to a shortage of supply at the processing plants, and a shortage of product, Mr Beetham said.
Last week’s latest North Island schedule released by AgriHQ show farmgate lamb prices are on the rise — lambs weighing 17.5kg are fetching $105 a head, up from $103.25 the previous week and $87.50 at the same time last year. Lambs weighing 19kg are fetching $114 a head, up from $112.10 the week before and $95 last year.
Mr Beetham said the start of the year was a different story and he had never seen prices like these until now, labelling it as “an extreme case”.
“Farmers held onto stock longer, meaning the processing companies have had to pay more to try and encourage farmers to offload their stock,” he said.
This resulted in less product processed, leaving exporters paying more for an alternative product.
“That’s been really valuable for Wairarapa farmers and meant that the value in our product has been pushed, certainly at the processing level and what processors are paying,” Mr Beetham said.
“But it has been a great autumn for store farmers.”
Store stock are bought by farmers to ‘fatten up’ for resale.
At a local level, farmers who have been offloading store stock have experienced “a once-in-a-lifetime” value.
“However, those dynamics hold some risk going forward in the long-term future — if our product becomes too expensive, then basically the international market will stop buying and people will look for cheaper products.”
It was the same old commodity markets story, he said – “if we see too much of an upswing too quickly with the value of our product, then that will be not sustainable, and it will come back down . . . it’s a risk more than anything else.
“We want to see a sustainable return for profitability.”
“It’s not as good for the finishing farmers, but there is still a profitable margin in it for them.”
For a lot of store farmers who have struggled in the Wairarapa with drought for the past couple of years, it was something they probably needed, he said.
In terms of sheep and beef farming, international values could see more profitable levels across the board going into the end of the year and into 2018.
“This is really good news for Wairarapa farmers.”