Lambs being trucked south

StockX South Island territory manager Sarah Perriam.
StockX South Island territory manager Sarah Perriam. Photo supplied.
A truckload of store lambs from the drought-affected East Coast of the North Island made the four-day trip to a Maniototo farm last month.

Although it is more common for North Island store lambs to be transported to Canterbury, both their purchase price and the amount of additional feed available this season in the region made it economically viable to truck them down to Otago.

Until a couple of weeks ago, the Hawke's Bay area had been in the middle of a severe drought, with farmers there hoping the Government would issue a drought declaration, which would allow them to receive aid.

PGG Wrightson South Island livestock manager Shane Gerken said it was more unusual for North Island store lambs to go the distance to Otago, as they were more likely to go to Canterbury farms, but this season there had been more feed than usual available in Otago.

Even though there were extra transport costs, it was still viable to bring them down.

He said freighting sheep, especially through the Lewis Pass, cost between $600 to $800 per trailer of sheep.

''We could buy them at $2.10/kg, which is considerably discounted, making it about $2.40/kg to to land them here,'' he said.

StockX's managing director Jason Roebuck said store lamb prices had been under pressure in the region because of the drought, making the North Island lambs cheaper than those available from the South Island markets.

''Even though [Canterbury and Otago] farmers paid for the [additional] transport to their farms, it was still cheaper than buying from their own markets,'' Mr Roebuck said.

He calculated the market difference for a South Island buyer buying lambs out of the North Island (freight included).

The local South Island price for lambs was $2.50-$2.60/kg. North Island price for lambs was $2.10/kg.

The transport cost to deliver was $0.27/kg.

Delivered price from the North Island was $2.37/kg.

This was $0.13-$0.23/kg cheaper than buying in the local South Island market, Mr Roebuck said.

In addition, as the lower South Island had an abundance of feed, so importing North Island store lambs made sense.

However, Mr Roebuck said the markets would eventually balance out across the regions and across the seasons.

''That is the market at work.

''They are not necessarily annual circumstances, but they are not unusual.''

StockX South Island territory manager Sarah Perriam said during the East Coast's drought period, Stortford Lodge's first sale of the year saw finishing lambs hit between $1.60/kg and $1.90/kg.

Southern farmers saw an economic opportunity, with most of the lambs going to Canterbury and further north.

''However, a truckload from the North Island was sent to a farm in the Maniototo,'' Ms Perriam said.

As a result of the demand, per kilogram prices rose slightly by about 20c to 30c/kg.

''It was the first time in a long time the price has been higher [in the South Island] than the North Island,'' she said.

She said no cattle had made the trip.

-By Yvonne O'Hara

Add a Comment