With all-time record grain prices, sheep producers simply cannot feed stock through this summer.
With a widespread sell-off of sheep already well underway in many districts, off-loading of stock has occurred one to two months ahead of last year’s big de-stocking.
Across much of south-eastern Australia feed on hand is better than this time last year according to Wagga Wagga based Holmes and Sackett consultant, Sandy McEachern.
"The pastoral areas are certainly in a bad state, as are the midlands of Tasmania, but with many growing grazing cereals this year things are not as bad," Mr McEachern said.
"But that said many are clearly choosing to sell all sheep except breeding ewes."
At $400 a tonne for barley, West Australian consultant, Kevin Bell, said wool had to be at $15 a kilogram to make it worthwhile - presently the eastern market indicator is just above $9 a kilogram.
Dr Bell said producers were looking to exit the sheep industry in the grain belt of the west but in the south of that State the season was still very good.
He added that lupins at $425 a tonne represented much better value for those looking to feed stock on stubbles.
NSW Livestock officer at Yanco, Geoff Duddy said sheep producers were simply sick of feeding stock.
With the feedlot calculator he has developed, Mr Duddy has tried to find a way to make money from cheap stock but can’t find a winner.
"Even Merino lambs at $20 and 20 kilograms now, with three months of paddock feeding need to make $3.50 a kilogram to break even and it wont be there," Mr Duddy said.
"The processors need to be offering $3.80 to $4.00 in February-March or they wont have many lambs to process."
Mr McEachern added that under a best case scenario, producers would not have to start supplementary feeding until January, given a decent break next year that would equate to $30 to $40 per head on feed but with a wool clip of $20 and a mutton value of $20 the breakeven replacement price would be $40 in 2008.
Dubbo, NSW, based consultant, Graham Peart, said across his territory sheep producers were running a third to a quarter of normal stocking rates with crops not high enough to cut.
"I am astounded by how people hold their sanity and humour," Mr Peart said.