Sheep shortage leading to silly prices

The ODT’s headline tells a classic supply and demand story: Sheep shortage underpins demand.

You don’t have to be an economist to know that when demand exceeds supply the price rises and people who frequent stock sales say stock agents and farmers are paying silly prices for sheep.

There are several reasons for this.

Sheep numbers plummeted over the last few years because of dairy conversions and drought.

There is an over capacityof killing space in the meat industry.

Last season’s milk price fall led dairy farmers to cut costs so some farms which were growing supplements or providing grazing for dairying are looking for sheep to eat their excess feed.

All of that’s led to an increase in demand which has led to an increase in price for store stock  which isn’t necessarily related to the value of the meat or wool on international markets.

2 Responses to Sheep shortage leading to silly prices

  1. gravedodger says:

    “Stupid is as stupid does”. When I was in Hawkes Bay at Xmas it was very obvious there was a serious lack of livestock related to the available feed stock. It has not changed and SIL’s family are facing the dilemma of surplus feed supplies.
    The problem being that on hill country uneaten roughage (rank grass) will lead to serious degradation of subsequent feed quality that is hard to remedy. On arable land it can be alieviated by cultivation and incorporation into soil as humus but on hill country it will be left to collapse and rot down.
    This leads some to buy at uneconomic levels and maintain pasture quality and lose money in the short term.

    Like

  2. George says:

    Example is Georgia. Here is very great demand and the price goes up.

    Like

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