Sheep farmers are facing mounting pressure as grass shortages force lambs onto the market earlier than planned.

ICSA sheep chair Willie Shaw has said drought conditions are putting sheep farmers under increasing pressure and giving factories an opportunity to push lamb prices backwards.

Those shortages are forcing farmers to move lambs earlier than planned, leaving them under fleshed and allowing factories to buy them cheaper.

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“When those lambs are under fleshed, farmers are in a weak position and factories know it. They can buy them cheaply because they know the farmer has to do something with them,” Shaw said.

Perfect storm

He added that pressure on farm finances this time of year, combined with a serious lack of grass creates a “perfect storm” for sheep farmers.

“We are used to factories taking advantage on August. Farm families are under pressure for cash at this time of year, but when you combine that with a serious lack of grass, it creates a perfect storm for sheep farmers.

“Farmers have fewer and fewer options and factories know it. The problem is that factories can see when farmers are under pressure and they use it to their advantage. That is not fair and it is not good for the sector,” Shaw said.

Store lambs

The drought is also putting pressure on the store lamb trade, according to Shaw, with some traditional buyers unable to buy store lambs due to grass shortages on their own farm.

“The store trade is being hit as well. Farmers who would normally buy stores are holding back because they simply don’t have the grass either. So you have lambs being moved earlier than planned, while the normal outlet for store lambs is also being restricted. That leaves farmers with very little room to manoeuvre.”

Shaw added that the overall sheep throughput figures were down on last year's, despite there being a few weeks where throughput was elevated.

“Despite a couple of weeks where throughput has been elevated, overall sheep throughput is still down on last year. What we are seeing is drought forcing some lambs to be sold earlier than planned. That is a temporary weather-driven pressure. It doesn’t mean there has suddenly been a fundamental change in sheep supplies.

“Factories know this pressure is being caused by drought, not by some sudden oversupply of lambs, and farmers are sick of these opportunistic tactics being used to drive prices down,” Shaw said.