AuctionsPlus Quarterly “Buyer and Seller Regional Rankings”

AuctionsPlus quarterly “Buyer and Seller Regional Rankings”  has been developed by the AuctionsPlus Insights team to increase market awareness regarding the transactional trends and regional movement of sheep and lambs through Australia’s largest livestock market. With all livestock sales on AuctionsPlus, the geographic data of the participants is provided, but remains confidential on an individual basis. However, the aggregation of the geographic data of buyers and sellers over a longer period, in this instance quarterly, can be very instructive and highlight various transactional and seasonal trends in regions across Australia.

Across the first quarter of 2022, a total of 1,260,339 head of sheep and lambs were offered through AuctionsPlus commercial sales - a seasonal decline of 16% from the fourth quarter of 2021. The key driver behind reduced numbers can be attributed to the seasonality of the market, as large volumes of lambs took the market by storm across the final quarter of 2021. Lamb numbers in the final quarter of 2021 accounted for 66% of total throughput, which then saw a steady decline across the first three months of 2022, making 52% of sheep and lamb throughput. A comparison of year-on-year numbers from the first quarter of 2021 places total sheep and lamb throughput for the 2022 quarter 13.4% higher.

Clearance rates across both sheep and lamb sales have been robust across the past two years - amplified by the positive seasonal conditions which have been the driving force behind flock rebuilding intentions. As seen in Figure 1, for the first quarter in 2022 clearance rates averaged 69% - sitting 6 points below the five-year average and year-on-year levels, respectively. Post-sale negotiations have played an increasingly vital part of securing a deal after the close of an auction during the first quarter of 2022 - with sheep and lamb sales rising a further 12% on average in the 48 hours following a sale (year-to-date 2022).

While the overall clearance rate can vary broadly across categories and weeks, the overall reduced clearance rate during the first quarter of 2022 has been matched by most categories recording price declines. Through the combination of a backlog of lambs due to wet seasonal conditions, logistical interruptions and cautious autumn buying, prices eased into March and have continued to weaken into early May 2022.

Influencing trading decisions through the first quarter of 2022 was the ongoing wet conditions though key lamb producing regions. While coastal regions coped several record breaking deluges, key inland producing regions also experienced above average rainfall. Mild temperatures combined with the wetter conditions, hindered lamb finishing rates – contributing to the backlog of lambs entering the market later than usual in autumn. The most recent winter climate outlook (figure 2 – right hand side) forecasts rainfall for most of Australia to be above median throughout winter, as well as temperatures to be warmer than usual in northern, south-western, and south-eastern parts of the country. It is anticipated that the outcome of this will increase confidence on a multitude of levels across the market throughout winter, as positive seasonal conditions and milder winter temperatures are conducive to enhanced ewe and lamb performance – maintaining the emphasis on flock growth.

Buyer & Seller Regional Rankings – Quarter 1 2022

In ranking buying and selling regions by the total number of sheep and lambs transacted through AuctionsPlus on a quarterly basis, the top three throughput regions for Q1 in 2022 were South West Victoria (16%), NSW Central West (15%), and the NSW Riverina (7%). The NSW Central West registered a 48% rise in total throughput from Q4 2021, totaling 213,988 head. South West Victoria, while accounting for the largest throughput for the quarter, with 224,779 head, registered a 23.8% slip in overall throughput on the platform - largely attributed to new season lamb volumes reaching their peak in the closing months of 2021. A similar trend was noted for the NSW Riverina, as throughput dropped 36.5% from Q4 in 2021, to total 92,048 head.

Central, southern, and western Queensland regions recorded considerable increases in total throughput for sheep and lambs over the quarter. Many of these areas across the state missed out on critical summer rainfall, with many vendors selling off lambs and older ewes while prices and demand remained buoyant. Table 1 illustrates regions with the largest rises in throughput from Q4 2021, to Q1 2022, whereby Queensland regions rank 1^st, 2^nd and 4^th for the quarter. All three Queensland regions recorded their largest quarterly throughput numbers on AuctionsPlus with the state listing a total of 179,967 head, or 17% of total sheep and lambs listed for the quarter.

The outflow of sheep and lambs from Queensland to interstate buyers is further explained by purchases made for the quarter, with western and southern Queensland purchases equating to 21% and 26% of their throughput, respectively. Recent insights into interstate movements for the quarter reveal that 50% of Queensland sheep and lambs sold to interstate buyers in the first quarter, with NSW accounting for 86% of interstate purchases. Figure 2 illustrates the location of Queensland sheep and lamb listings and where the interstate purchases are travelling.

In addition to the top throughput regions, a comparison of total listings within each region for the quarter with the total number of head sold revealed the regions which returned the top clearance rates. For the Jan-March quarter, top sheep and lamb clearance was achieved by the NSW Slopes and Plains (92%), North East and Northern Victoria (90%) and Gippsland, Victoria (85%).

Table 2 provides insight into the regions with the largest quarterly change in the number of sheep and lambs sold for the quarter. Considerable rises in the number of head transacted compared to the previous quarter across large throughput regions such as the NSW Riverina and Central West - up 22% and 53%, respectively, reveals robust and ongoing purchasing intentions from stock listed in the region with a majority of purchases remaining within or close to the region.

Sheep and lamb purchasing results for the first quarter of 2022 show that Central West NSW remained the “purchasing powerhouse”, securing a total of 73,065 head for the quarter - 18% of total purchases. The NSW Riverina and South West Victoria regions also continued their strong purchasing trends from the previous quarter, securing 13% and 9% of total purchased stock across the three months. While both the Riverina and South West Victorian purchases were both dominated by new season lambs, the unwavering rebuilding intentions of the NSW Central West stood out with 42% of purchases consisting of breeding ewes.

Taking a deeper dive into the top throughput areas for the first quarter of 2022 is indicative of large selling “hotspots” across the country. Table 4 reveals the top 5 throughput and purchasing locations for the quarter, where NSW areas account for four of the top five largest regional throughput numbers which amounts to 11% of the state’s total listings. On the purchasing side, the top three NSW purchasing regions accounted for 22% of the states’ total purchases for the quarter.