Farmer Jason Smith usually winters up to 12,000 store lambs on his farm near Gore and sends them away for slaughter about now.
However, when it was time to buy the store lambs in autumn it was challenging to calculate if a margin could be made, as his meat company was not giving any signal of spring slaughter prices.
Consequently, his focus shifted to "do a bit more beef".
Fortuitously, a vendor from a hill-country farm in North Canterbury was left in the lurch when a regular deal for some of his beef calves fell through due to the usual buyers pulling out as dry conditions bit up north.
The calves had great temperaments so Mr Smith bought them and told the vendor he would buy them at the same time every year, no matter the season for either party.
"As long as I leave enough in for them so they can survive and we can get enough to do what we are doing and we know they are coming and they now know they are leaving."
Now a new objective on the farm was to have enough feed available so the deal was done and the business relationship was maintained.
"As soon as we let that relationship go, our opportunity to go and purchase store stock is going to get very thin."
He felt beef calves and store lambs would be harder to get for reasons including dwindling stock numbers and blanket afforestation.
No forestry on the farm had been entered in the New Zealand Emissions Trading Scheme — "I think it is a ponzi scheme".
If feed was tight on his farm, he would continue to buy the calves and take any reduction in margin "on the chin" to ensure the trading relationship continued.
The business relationship between farmers finishing stock and meat processing companies had room for improvement. A processor could provide a price signal so farmers could make better informed decisions on how much to pay for store stock.
"So we know what we are going to get at the other end. I know they’ve [processors] had a tough time but I think they can run their businesses a bit better than they have."
Processors should provide price signals and share more of the risk "or they’re not going to have any stock to kill".
Fattening beef calves over winter had been easier than finishing store lambs for reasons including animal health and calves not needing to be shorn, crutched, dagged, or drafted and loaded on trucks to get the works, he said.
Due to the fewer duties required for fattening beef, he had been able to get through winter with himself and stock manager Jeremy Nicholls.
In hindsight, if he had bought store lambs as usual he would have made an acceptable margin but he hopes the decision to buy beef calves would pay off.
Whether he had made the right decision would be answered at his inaugural spring yearling cattle sale at Charlton Saleyards near Gore from 11am on October 17.
Mr Smith was offering about 1600 rising 1-year-old steers and heifers including pure Angus and Hereford cattle.
"About 700 of them would be straight Angus steers."
The yarding was too big to be included as lots in the Gore Spring Cattle Sale so he decided to hold his own auction.
If the sale was a success and he could get the store calves to fatten from the same vendor each year, then he would consider making the auction an annual event.
He had offered the cattle by private treaty about a month ago and offers were made for bigger cattle.
All offers were declined because the bigger cattle were a "drawcard" for the Charlton sale.
"If you pull them out it will compromise the sale."
He doubted any private offer would be accepted due to the sale being organised.
"We have booked Bidr, the saleyards and transport — it is a whole lot to undo. Any offer would need to be exceptional to take them now."
He had considered holding the sale on his farm to avoid loading 17 trucks and trailers but it was safer in the saleyards and the saleyard location was easier for buyers to get to.
If any cattle did not meet reserves, they would be returned to his farm.
The reserves would be set so there was enough margin in it for the buyers.
"You’ve got to leave something in it for somebody else."
The farm system was flexible enough that it usually had enough feed for a quick change to accommodate livestock.
"It all pans out in the long run."
Feed supply was tightest in autumn when more than 20,000 lambs could be on the farm, a mix of lambs bought in November and set to leave for the works and store lambs and calves arriving to eat winter crops.
Autumn had been mostly favourable so lambs were bigger than usual when put on the truck.
The sheep breeds run were mainly North Island hill-country Romneys and Perendales from Northern Southland.
"They have to have good bone and good constitution so they can stack some weight on."
Belly crutching his lambs this year cost Mr Smith about $85,000 and the wool was sold for $4000.
However, belly crutching them meant he fetched a premium at the works.
He once ran a few shedding sheep breeds and doubted he would again.
"They don’t grow, they’re too slow."
He grows oats to produce silage and baleage to use and sell.
Up to 8000 bales of baleage were made a season.
Mr Smith was born and raised on the farm in Waimumu and was the second generation to run it.
All of his and his wife Debbie’s children, D’nique, Jordan, Riley and Abby had forged their own careers but were keen to go farming one day.
His father John, 80, bought the family farm in Waimumu in the mid-1960s and bought nearby land in 1972.
Mr Smith increased the farm size by buying the Waitane block in 2018 and a neighbouring block in 2022.
John now lives in the former Waimumu School house and digs for gold and white silica sand and gravel on the farm.
"I’ve been unloading trucks since I was a kid."
Mr Smith once ran a flock of breeding ewes for a few years but returned to finishing lambs after being "smacked by a snowstorm".
Trading livestock to fatten and finish was a "bit of a gamble" and required decisions to be made on a "gut feeling".
"The whole thing is crystal ball gazing."
He tried to be ahead of the market by forecasting what the meatworks would pay and then hope he did not get caught out by a downward commodity price cycle.
"When it goes wrong, it goes horribly wrong and you need to manoeuvre your way out of it — you either have to hold on to your stock longer to get a return out of them or get into something else quickly that is going to make you some money."
Smith Farming
What: Sheep, beef and arable.
Business: Lamb finishing, calf fattening and cut and carry.
Where: Waitane and Waimumu in the Gore District.
Area: 960ha.
Terrain: Flat to rolling.
Cattle: About 1500 store calves.
Sheep: About 45,000 store lambs.
Cereal: About 130ha of oats for silage and baleage.
Winter crops: About 40ha swede and 50ha kale.
