Sheep and Lamb Quarterly Power Rankings

AuctionsPlus sheep and lamb listings for the second quarter (April-June) of 2022 reached a total of 795,634 head - a 37% decline from the first quarter of the year and a 7.4% decline from the corresponding quarter in 2021. A key driver behind the reduced number of sheep and lambs transacted through the platform can be attributed to “disrupted seasonality” of the market. While lambs accounted for 55% of the catalogue across the quarter, a large proportion of lambs were close to ageing out or had already been joined to respective sires.

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 Q2 in 2022 were the NSW Central West (137,021 head), Southwest Victoria (123,868 head) and the NSW Riverina (57,194 head). The NSW Central West and Southwest Victoria regions recorded higher throughput compared to the corresponding quarter in 2021, up by 16% and 10%, respectively. The NSW Riverina however registered a 24% decline in total listings. While overall throughput remained relatively stable year-on-year for the quarter, both Western Queensland and Western NSW registered the most significant reduction in numbers - back by 46% and 48%, respectively. Improved seasonal conditions and producers retaining stock in these regions were the key drivers behind reduced throughput.

Looking to purchasing trends for the quarter, post-sale negotiations played an increasingly vital role in securing transactions, following the close of an auction. While 70% of sheep and lamb lots transacted were sold at auction, 28% of total sales were made following the auction, as vendor and buyer expectations were adjusted to lock in a deal.

Clearance rates for the second quarter of 2022 aligned with the 2021 trend of an overall reduced rate of purchases online (see Figure 1). While throughput levels decreased due to the seasonality of the sheep and lamb market approaching the winter lull and lambing season for the majority of producers, the 66% clearance rate for the quarter was the lowest since the January quarter in 2018 (Figure 1).

Reduced confidence and lower clearance rates are expected to continue well into the third quarter of the year, accompanied by lower throughput numbers compared to 2021. Wet conditions, logistical and processing backlogs and labour shortages will continue to provide a challenge, as well as caution by both buyers and sellers arising from an overall fall in sentiment. Such factors have culminated in a much softer market in July and early August, as many producers “sit on their hands” in anticipation of the market re-igniting as spring approaches.

While the supply of sheep and lambs declined as the cold and wet conditions approached, clearance rates usually rise in response to tightened listing numbers. Comparing the second quarter of 2022 to the corresponding period in 2021, clearance rates overall were sitting 4% lower, however, there was a considerable difference in clearance levels on a regional level. While regional clearance is highly dependent on throughput and weather, it remained clear that positive seasonal conditions and strong purchasing intentions from producers underpin high clearance rates.

Looking to Table 2, Northeast and Northern Tasmania registered the top clearance across the regions, with 97% - up 12% on the same period in 2021. In South Australia, a small number of listings registered from the York Peninsula sold to an 84% clearance rate - rising 55% year-on-year. While three of Queensland’s’ four regions placed in the top ten for clearance rates, all regions in the state registered annual declines in clearance rates. The high clearance can be attributed to a large proportion of shedding breed sheep listed, and purchased across Queensland, with the breeds enduring ongoing demand across the quarter. Central Queensland registered a 10% slip in clearance rates year-on-year, to 90%, while Western and Southern Queensland recorded clearances of 85% and 72% - back 4% and 2% annual, respectively.

Sheep and lamb purchasing regions:

While the top ten purchasing regions remained largely the same as the throughput regions, an overall decline in sheep and lamb purchases in comparison to the same period in 2021 was clear. The NSW Riverina, the second largest purchasing region for the quarter, registered the largest decline in sheep and lamb purchases, falling 86% year-on-year.

On the other hand, Southern Queensland registered the largest annual quarterly rise, with purchases increasing by 238% following a turn in seasonal conditions following heavy and widespread rain at the end of the first quarters - spurring producers to add to their sheep enterprises. Southern NSW and Monaro regions registered a 106% rise in purchases, as ongoing positive seasonal conditions underpinned the opportunity maintain flock growth and breeding programs.