6 August 1999

CURRENT breeding ewe values present a good investment opportunity, particularly for those looking to replace dairy cows, but few buyers have cash to spend.

The opening breeding ewe sale at Penrith for replacements suitable for early lambing flocks follow what is becoming a trend, with the cull trade setting a floor in the market, says Michael Bowe.

The days trade was similar to that seen further south. "Geld ewes are trading at £15-18 a head, holding up the price for the older breeding ewe which are selling at £2-£3 over the cull trade," he says.

Many factors are suppressing breeding values, not least a cull price which is being dragged down by the high charges faced by abattoirs for splitting carcasses and a well documented collapse in the skin trade. While not good news for vendors, those buying were getting stock at a very reasonable price.

"For vendors its a depressing trade with some southern sales seeing shearlings trading at £40 each. Continental ewes with three or four teeth are making £25-30 and broken-mouthed types back at £20. Its definitely a buyers market."

Only those with conviction and spare capital are buying at the moment, he adds. This caution can only be expected as the extra costs of the early prime lamb market were effectively washed away as the flood of hoggets met a buoyant trade earlier this year. The flush and run of new season lamb prices was fading fast by mid June as the numbers needed by supermarket buyers failed to materialise with the damp spring weather affecting finishing.

"Spring lamb prices touched £55-60 for the better sorts, but it didnt last long. If the prices had stayed strong for longer, I dare say producers would have found a few extra lambs for the market earlier."

With the extra cost of housing, feeding and labour dampening down early flocks enthusiasm, dairymen have been replacing faces at the ring-side. Having dispersed a herd and cashed in quota some are out to replace cows with sheep: "They may just add to demand," he says.

For many buyers it is a case of wait and see. The big test will come with the first major shearling sales this month, says Mr Bowe. These will indicate just where the trade is going and give a benchmark against which buyers can judge prices.

"It will be the money made by those who bought at these sales last year that will determine where prices go. Given the poor lamb trade so far, for many vendors having faces at the ringside looking to buy will be the main concern rather than trying to guess where prices will be."

And for those buying, cash-flow will dictate what they can spend.

"The signs are that things are tight all round. Evidence from the fat ring is that finishers are getting lambs away as soon as theyre fit. Theres a lot more lambs being marketed at 38-39kg when many would have held these until over 40kg."

His expects shearlings will trade at £50-60 each compared with £65-75 seen last year. "If these prices are seen, shearlings capable of giving four or five crops of lambs are a good investment. People know that, but its where the money is to come from thats the question." &#42