Store-lamb farmers are being urged not to make drastic changes in response to two years of low prices.
The price of store lambs has been particularly low this year due to widespread dry weather, an increase in the number of capital stock being slaughtered and general negativity in the sheep meat industry.
Meat and Wool New Zealand regional manager Aaron Meikle said research showed the store price for the whole of the South Island over a whole season was consistently about 75% to 80% of the prime price.
For someone selling store lambs on the South Island's east coast during a dry January and February that might not be achieved, but it proved an accurate comparison over time, he said.
Store lamb producers had ‘‘done it tough'' this year, with the price falling as low as 80c to 90c per kg liveweight for some fine and medium wool breeds in Canterbury, but closer to $1 a kg live weight in the South.
Last year, the lowest price was about $1.30 a kg live weight on a lower prime lamb schedule.
Mr Meikle said the prime lamb price was a greater driver of the store market than competing land use.
While there had been plenty of hype about the number of dairy conversions, the reality was that dairy cows would replace 3.5% to 4% of the sheep flock, not 10% to 15% as some people had predicted.
However, booming cereal prices could affect the number of lambs bought by cropping farmers this autumn.
Mr Meikle said that in the last 10 years, mixed cropping farmers had been significant buyers of store lambs in the autumn, but they now had choices between dairy grazing, winter cropping or stock trading.
Their final decision would be determined by the margins achieved, and there were still good margins available from finishing store stock.
‘‘Everything at the moment is coming up roses for mixed cropping guys.''
Mr Meikle said this year was out of the ordinary for the store lamb industry, and farmers should look at the bigger picture.
‘‘If you make a decision based on this year or last year, it does not look good.''
The quality of the flock was improving each year, ewes were having more lambs, which were reaching killing weights earlier, allowing farmers on store country to wean prime lambs off their mothers.
‘‘We aren't getting the wave of runty lambs some were predicting,'' he said, pointing to higher lambing percentages.
PGG Wrightson Dunedin livestock manager Andrew Kelleher said the widespread dry weather was making this year difficult.
It would allow those finishing farmers with grass to concentrate on forward quality lambs, from which they would make attractive margins.
They could pick and choose what they bought and there was little demand for the smallest store lambs.
Normally, if it was dry in one part of the country there was grass in another, but that did not happen this year.
He said the store lamb price last year never fell below $1.30 a kg liveweight, whereas this year some fine-woolled breeds in Canterbury sold for 80c to 90c a kg liveweight.
Recent rain in Canterbury had seen some store stock head north.
Mr Kelleher said a greater number of ewe lambs than normal were being killed this year in part due to the large number of capital breeding ewes on the market and the view there was little market for two-tooth ewes.
‘‘A ewe lamb is killing out at $50 and you can buy good breeding ewes for $40.''
Other farmers had taken the opportunity to trade up the quality of their flocks, Mr Kelleher said.