WESTERN Australian sheep producers like Glenn Woodhams are juggling the fall-out from the halting of the live export trade to the Middle East.
Mr Woodhams and his wife Helen run shipper wethers on a mixed farm at Kojonup and trade about 13,000 Merinos a year supplying the live export trade.
By now, he should have sold 3000, but they are still in the paddock as shipping orders dry up.
“We normally would have sold 3000 wethers by now which has impacted on cash flow naturally.
“A completely different set of circumstances have come about in a relatively short time,” Mr Woodhams said.
“Fortunately, with the wool price the way it is, we may be able to buffer a reduced trading margin with increased wool sales by shifting our October shearing and delaying normal summer destocking until February, shearing extra kilogram of wool.
“The forecast margin of $450-$500/ha (based on the later shearing) gets us some of the way there,” he said.
As a business, the Woodhams have mitigation strategies and are starting to think what these might be if there is further suspension of the trade.
“We can’t do anything about it (if the trade is halted) and we will deal with that if it happens,” Mr Woodhams said.
In the past, the difference between the shipping price and the mutton has been about $20. Some analysts at LambEx 2018 in Perth last week were suggesting that sheep prices could settle at $25 less than the eastern states mutton price, or the cost to transport them to the eastern states, if the live trade suspension continues.
While two-thirds of the Woodhams farming enterprise is cropping (an even mix of barley and canola), a third is sheep and centres around trading wethers for live export. This is a different mix than 1992 when the mix was more like 90 per cent sheep and 10 percent cropping, with the harvest of grain mainly used for supplementary feeding.
They ran a typical self-replacing Merino flock, but switched to cropping with a mix of flexible livestock, with the trading sheep run on the 15 per cent of the farm that couldn’t be cropped because it was too wet.
Mr Woodhams said they normally sourced sheep for their trading enterprise in spring and early summer, and would reassess what they would buy if the live export situation became clearer.
“If we still continue to trade, it is still all about the margin.
“We can buy in ewes and begin mating them and revert back to what we used to do – a self-replacing Merino flock,” he said.
“Getting through this year is our immediate concern and we may be readdressing our strategies a lot quicker than we thought.”