Ag News

Can Sheep and Wool win back the acres?

  • By: Farm Tender "Prime"
  • Jul 27, 2017

By Robert Herrmann of Mecardo

For some time, we have been writing about our concerns for the Merino Wool industry, noting the “fight for acres” to date has been well and truly won by the croppers. To top it off, the number of ewes now mated to terminal sires has also been growing. It hurts an old shearer/wool classer/wool broker/wool market watcher to see properties that for over a hundred years proudly produced Merino wool, jump ship and either rip out the fences and plant crops, or purchase terminal rams and get into prime lamb production.

Flock falls since 2010-11.

Between the 2010-11 and the 2015-16 census collections, the ABS estimate a decline of 10pc in the number of farms reporting to have sheep to 31,000. This decline reflects both fewer farms running sheep and the increased Estimated Value of Agricultural Operations (EVAO) base of $40,000 used by the ABS, compared to the previous $5000 minimum. MAKE MERINO GREAT AGAIN.png

So now Australian Bureau of Statistics (ABS) has released the result of the 2015-16 national sheep industry survey confirming that the sheep flock has declined almost 1% from the previous year, and 3% since the previous census in 2010-11.

As Annabelle Cleeland notes on Farmonline National, “Australia’s flock is now at the lowest level in more than a century”.

In fact, there are now only 31,000 farms reporting to have sheep, 10% less than the previous census.

What really confirmed our fears (and further depressed this ex-shearer), was that farms identifying as Merino declined by 25%!

Merino wool decrease.

We noted previously that the amount of Merino wool has shown a steady decline, that is wool finer than 23 microns has decreased.

Since the last ABS census, Australian Wool Testing Authority report the number of tested bales of 23 microns and finer have fallen by 39,845 for the selling year. This was not a bad result as the rate of decline appears to have slowed.

It’s when you look at it over the past 10 years that the magnitude of the shift is obvious; 499,555 bales of Merino wool less were tested in 2016-17 season compared to 2006-07 season.

The challenge is to ensure that the decline has finished, because another move down in production would be disastrous. Fewer bales will mean fewer wool producers, less levy funding for R & D and a general decline in the relevance of the Australian wool industry. Wool brokers, exporters, AWTA, AWI and wool processors will all be reviewing their business models if we see another reduction in bales and subsequent reduced revenue flows.

Could Merino production fall further?

While the current prices will at least maintain the volume of Merino sheep, and in fact should result in increased matings to Merino rams, a retracement in wool price could see another exodus.

There are a couple of proviso’s however, as noted by Kimbal Curtis in the Farmonline article, “the sheep industry appears to be consolidating itself as a dual product industry with both wool and lamb production well supported”.

There is no doubt the merino breeders who have evolved into producing sheep that have meat capabilities are at the moment doing extremely well.

So too are the fine wool specialists with recent increases in this end of the market rewarding the faithful.

But if wool doesn’t hold these price levels, or at least somewhere near them, will the urge to focus on the sheep meat enterprise see a further shift to the prime lamb industry?

Can wool win back acres?

Well, we think we know why we have seen a rush to cropping at the expense of sheep acres. It’s not because there is less ...
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