Record exports reduce flock numbers

"It is estimated that the WA sheep flock was just 13m in mid-2016," DAFWA's latest Sheep Notes states.

"In July 2015 the Australian Bureau of Statistics (ABS) estimated the total number of sheep and lambs in WA was 14m head.

"Provided the five-year averages held true, about 5.85m lambs were marked."

The total turn-off, which includes sheep and lamb slaughter, live export and interstate transfers, came to 5.86m.

"Including an allowance for losses on farm, this gives a closing number of 13m sheep for the close of the 2015/16 financial year - a year-on-year decrease of 7 per cent," the updates states.

The drop in numbers was attributed to record sheepmeat exports, with DAFWA reporting a 4pc increase in lamb and mutton exports, compared with 2015.

The report said the WA flock had 14m sheep and lambs in July 2015, including 7.5m breeding ewes.

As of mid-November 2016, 189,000 sheep and lambs had been trucked east from WA, a 108pc increase when compared to the full year in 2015 (91,000 head).

"Following two decades of decline the WA sheep flock reached its lowest number in mid-2011 when it numbered just 14m head following a severe drought in the prime sheep producing regions of WA.

"Between 2010/11 and 2012/13 the flock went through a recovery phase rebuilding to 15.5m - an increase of 10pc.

"However, over the past two years the size of the WA flock has contracted, declining to 14m by mid-2015.

"Similarly the number of breeding ewes has declined during the past 10 years.

"In 2004/05 there were 13.3m ewes but this number fell to 7.5m in 2014/15."

DAFWA sheep industry development director Bruce Mullan said the department was working with industry to build capacity and deliver the volume and quality of sheep and meat required by existing and potential new markets.

"The department's Sheep Industry Business Innovation project (SIBI) has initiatives, such as the lamb survival project and Life Time Ewe Management, dedicated to lifting sheep numbers and helping producers increase reproduction rates to ensure the sustainability of WA's sheep flock," Dr Mullan said.

"The lamb survival initiative provides support for producers to lift their sheep enterprises' lamb turn-off through access to an experienced accredited consultant to help build producers' confidence and skills to lift marking rates.

"SIBI is working with industry to identify and address barriers to adoption to support greater confidence to invest in and increase productivity in sheep enterprises."

Mr Mullan told Farm Weekly that while prices for 2016 were buoyant and good for farmers the future of the industry needed to be considered.

"The numbers put us in quite a precarious situation," Mr Mullan said.

"While good prices are good news for industry, unfortunately if producers are selling breeding ewes there will be an impact.

"We won't be able to produce the number of lambs in future years that we require."

Mr Mullan said the estimated average marking percentage of 103pc would be required to maintain the flock size, but WA sits on 88pc on average.

"We need a large improvement by industry to lift that productivity," he said.

"I think some parts of industry are focused on this.

"It is possible, but it needs commitment."

Mr Mullan said unless something was done, the sheepmeat industry would feel a squeeze at some point.

"There won't be enough animals to keep all those businesses viable," he said.

"I don't know when that might happen, but year by year we will get closer."

Mr Mullan said the situation was something to worry about and farmers needed help to feel more confident.

"I think we need better communication along the supply chain, to give confidence to producers in the long-term future of the industry, in sheep, wool and meat,'' he said.

"If they don't have long-term confidence they will continue to make decisions on a year-by-year basis."

While the DAFWA analysis suggests that WA sheep numbers were as low as 13m at June 2016, the Sheep Alliance of WA said these predictions couldn't be ratified until the next round of ABS data is released in 2017.

"What the alliance continues to seek to understand is if the strong returns for sheep and wool will ultimately arrest the gradual downward trend that we are seeing in our overall sheep numbers," said chairman Craig Heggaton.

"There is some anecdotal evidence that our directors are reporting from the medium to high rainfall zones that farmers are retaining older ewes as a strategy to slightly increase their flock numbers and director and sheep consultant Andrew Ritchie is certainly reporting from his client base, there is no evidence of breeding ewe decline.

"The strong market signals and poor cropping results are obviously contributing to that thinking."

Alliance directors also responded to the need for a 103pc marking rate to maintain numbers with the ABS reporting the marking rate was only 88pc from 2011 to 2015.

"The alliance will continue to work with DAFWA to help understand the matrix and consequence of flock composition, turn-off and lambing percentage and the likely impact this has on sheep population," said executive officer Esther Jones.

Mr Mullan said some people had doubted the numbers in the past.

"But we were not wrong in the past about our numbers," he said.

DAFWA research officer Kate Pritchett said the value of WA sheepmeat exports from January to October 2016 rose to $273m.

"The projected end-of-year value for 2016 sheepmeat exports of $328.8m is the highest on record," Ms Pritchett said.

The United Arab Emirates was the biggest market, accounting for 12pc of exports, followed closely by China at 11pc, Jordan at 10pc and Saudi Arabia and the United States both at 9pc.

Wool exports rose 10pc compared to the previous year, to $429m, based on January to October figures.

Ms Pritchett said the movement of sheep interstate for slaughter or restocking was notable this year.

"As of mid-November, 189,000 sheep and lambs had been trucked from WA, more than double 2015 levels," she said.

The alliance said there were some positives with record wool prices, high sheep demand, excellent clearances at ram sales and a good spring delivering a welcome and overdue sense of buoyancy to the WA sheep industry.

Even the doubling of the interstate breeding ewe market has been a bonus for WA sheep producers.

"The view of our directors is the interstate transactions are sheep that would have been surplus to breeding requirements anyway and this has not impacted the core WA breeding flock," Mr Heggaton said.

"It does suggest though, that the sheep industry in the eastern States has a very positive view about sheep profitability, as they go to significant efforts to carry out their restocking programs."

Fletchers International Narrikup abattoir general manager Greg Cross said it was a good winter, with a lot of rain and feed for a lot of WA.

The good season meant more producers held onto their lambs and he believed the numbers could reflect that next year.

"We have noticed a trend of more farmers holding onto lambs," Mr Cross said.

"In the past few years, and especially this spring, we didn't have as many lambs come through.

"The numbers are a concern and I think the department is doing its best with its programs to drive up sheep numbers."

Mr Cross said many factors could influence the WA flock.

He said with an ageing farming demographic, younger farmers were turning to cropping and wild dogs in the north were also affecting sheep producers.

"Processors can help bring confidence in price, but farmers are saying they are pretty happy with the prices," Mr Cross said.

"As for the return for prices of livestock - I have never seen prices be so consistent and attractive in as many consecutive years for wool and meat.

"I am not sure why the sheep numbers keep coming back that dramatically.

"Sheep are marketable, it's a big world and people need to be fed and they want protein."

p More information: the latest Sheep Notes is available from the department's website at www.agric.wa.gov.au