Long road for Australia's flock rebuild

A long road ahead for Australia's flock rebuild


Sheep
Drought conditions has lowered the quantity and quality of Australia's wool clip.

Drought conditions has lowered the quantity and quality of Australia's wool clip.

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Australia's sheep flock and greasy wool production are now verging on century low levels.

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The Australian sheep flock and wool clip are under immense pressure due to the continued tight grip of the drought with producers saying the industry faces a long road ahead.

For the past decade both commodities have remained relatively stable, but now, as a consequence, greasy wool production and sheep numbers are verging on century low levels.

In April the Australian Wool Production Forecasting Committee forecasted that Australian shorn wool production for 2018/19 will be 298 million kilograms (mkg) greasy.

That is a 12.7 per cent decline from the levels in 2017/18 and equates to a drop of 43 million kilograms and the lowest yield since 1924.

Committee chair, Russell Pattinson said while there was fewer sheep to shear, the industry was also receiving less wool per sheep.

"We're looking at a seven per cent reduction of the sheep shorn and a 4.5pc reduction in the average cut per head," Mr Pattinson said.

NSW has been the hardest hit, with a prediction of 20pc reduction, but South Australia has also been significantly impacted with a 10pc reduction and Queensland, who have been suffering drought conditions for some time now, are also down 10pc.

In Western Australia the clip has reduced by 7.2pc on last year.

In the latest Meat and Livestock (MLA) industry projections for Australian sheep, with sheep slaughter to remain relatively high and no imminent break in the season, the flock is expected to decline by a further 3.7pc by June to just 65.3 million head.

To put these numbers in perspective, the Australian sheep flock was at hits highest in 1970 when it stood at 180 million.

Numbers fell to 68 million in 2009-10, which was the smallest Australian sheep flock size since 1905.

During the following decade, there had been a steady increases or stabilisation in numbers.

But the industry is now facing it's smallest sheep flock on record.

Victorian sheep breeder Robert Harding, Glendonald Merino stud, Nhill, said he believes the figures are conservative and the industry has a long road to recovery ahead of it, especially if other factors come into play.

"I think we could be looking at a figure10,000 less than that," Mr Harding said.

But he said one of the biggest shames for the industry is the supply shortage the wool industry is now facing.

"All the marketing work that has been successfully undertaken and executed by AWI in the last decade with the fashion trade, sporting industry and encouragement of new blends, that demand it has created, we now can't keep up with supply," he said.

"If we could get the flock back to 80 million, which I think is about all we could probably feed at the moment, the wool industry would be a $10 billion export earner for Australia.

"We cannot afford to keep dinting the industry, and the biggest threat is the demise of the live sheep trade finishing. The decline in sheep numbers will be enormous, I believe up to 30pc."

Mr Harding pointed out that even with the prime lamb industry, unless you have first-cross ewes or Merino ewes to breed the prime lambs out of, we won't have a prime lamb industry.

"But that is easier said than done, and the pressure and effects of the drought are devastating," Mr Harding said.

"And now prices to restock are mind boggling.

"There is talk of bare shorn ewes in lamb soon being worth $300 or more per head."

Western Australian sheep producer Stephen Bolt, Corrigan, said he believes WA has tipped past it's point of sustainability.

"There would have to be some massive retention of breeding stock within WA for us to look at a rebuild," Mr Bolt said.

"The last four years shows we have just maintained our numbers, but as an industry we know we need to build numbers for the sustainability for the entire wool and sheep industry.

"We are really just treading water at the moment."

Mr Bolt said there has been a definite transition in land use over recent years where cropping or first-cross operations have been favoured over Merino flocks.

"Especially in the southern states, you only have to look at the wool testing coming out of Melbourne - the amount of crossbred wool going through the market to know that terminals are increasing," Mr Bolt said.

"In WA we have looked at the figures particularly hard considering the current state of live sheep exports.

"We are sitting at roughly around seven million ewes, a bad season is certainly going to have an impact, but I think the biggest impact will be if Labor announces a phase-out of live export if they form government.

"Ten per cent of ewes could leave WA this year if it keeps raining in the east and doesn't rain here, and an announcement is made to phase-out live export."

There would have to be some massive retention of breeding stock within WA for us to look at a rebuild - Stephen Bolt, WA sheep producer

In the year ahead, many producers will be hoping for some consistent rainfall to help alleviate the pressures associated with high feed costs.

Although good rainfalls have been recorded throughout south eastern regions of late, follow-up rain is needed to ensure short-term improvement is sustained.

Mr Pattinson said the committee's first forecast for 2019/20 is for shorn wool production to be 285 mkg greasy, a further fall of 4.5pc, due to a reduction in the number of sheep expected to be shorn.

"This early forecast assumes normal seasonal conditions in 2019/20, with median rainfall would allow sheep numbers to steady, but better than median rainfall would allow sheep numbers to increase," he said.

But it is not all bad news, longer term, high prices across both sheepmeat and wool provide a strong incentive for producers to rebuild their heavily depleted breeding flocks once conditions allow.

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