Merinos MIA?

If John Macarthur was around today he would be doing things very differently

GIVEN our ever-shrinking sheep flock, perhaps we should be asking when Australia's Merino numbers will hit zero?

That would be an offensive question to ask any dyed-in-the-wool Merino breeder but the industry needs to urgently start charting a more profitable future or it probably won't have one.

Sheep are not about to disappear, given the strong demand for lamb and mutton, but will the Merino keep its place on Australian farms without higher, more stable wool prices?

Australian Merino wool is being marketed overseas as a luxury natural fibre but returns to finewool growers haven't been luxurious.

Retail prices for clothes made from our best Merino fleece are expensive, so wool producers clearly aren't getting their fair share of the consumer dollar. And how can they extract more value for their hard work and investment when they have so little power in the supply chain beyond the farmgate, the same supply chain that's happy for

producers to splash about $30 million a year on global marketing campaigns?

The Australian Merino industry has rich and colourful history full of larger-than-life characters (think of people like John Macarthur, Otway Falkiner, Sir William Gunn and David Asimus).

Merino pioneer, John Macarthur, is arguably still Australia's most cantankerous public figure. Many of those who have followed in his footsteps have been similarly driven, passionate and irascible. Some unkind critics might also add "irrational".

Through sickening price crashes, crippling droughts and periods of deep negativity about the future of their beloved fibre, generations of Australian Merino producers have kept pumping out wool. And they have kept bickering among themselves about things like the use of objective measurement in sheep selection, wool selling systems and

marketing schemes.

The flock has contracted from 170 million head in 1990 - when the wool reserve price scheme imploded - to around 70m today. The floor price scheme had its genesis in the big market collapse of the early 1970s when the flock reached an all-time high of 180m.

In the past 25 years the annual clip has been pruned from around one billion kilograms to 330m/kg a year.

Flock numbers probably won't dive much lower, given the strong overseas demand for our high-quality lamb, in particular. This demand, if sustained, has the potential to further reshape the sheep flock away from Merinos.

Australia holds most of the aces in global export markets for both lamb and wool because we are the major sources of supply. The difference is that lamb demand is spread among a number of countries while the market for Merino wool is dominated by China.

Woolgrowers urgently need to have some very deep conversations about how they can make their industry more profitable and sustainable.

Genuine discussions, not polarising bunfights about the value of objective measurement and genetic tools in breeding more efficient sheep or divisive slanging matches about the worth of Australian Wool Innovation or the CRC for Sheep.

Growers need to decide on what organisational and research structures they need to build a sustainable future. If the present structures need changing, do it.

Growers need to decide what structures that will best help them - not politicians and their hangers-on. And they may need to look beyond the archaic auction wool selling

system to get better returns for their fibre. Growers surely need some skin in the game beyond the farmgate to share in the spoils and risks of taking their fibre to the retail level.

One thing is for certain, if John Macarthur was around today he would be doing things very differently.

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FarmOnline
Vernon Graham

Vernon Graham

is the group editor of Fairfax Agricultural Media
Date: Newest first | Oldest first

READER COMMENTS

wtf
4/07/2014 1:48:57 PM

for my 2 cents of opinion, there needs to be some competition. more competitive uses for wool and more competition in the processing side. Although wool people might think it devalues their distinguishing quality product by supplying other competitive users (eg building products), it will provide an element of competition, something the industry needs.
JoYohana
3/07/2014 5:32:47 PM

But what would Elizabeth have done? Or better her daughter having established the Dairy Industry which operates in the same way today
Bushie Bill
3/07/2014 6:48:17 AM

'Course he would. What is so surprising about that?
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