AFTER taking a battering from price volatility in recent years, expansion of live export trade markets in the Middle East has provided a spark of hope for the Western Australian sheep industry.
However, as WA sheep prices jump up with a 63 per cent leap in three months, concerns have been raised that a focus on live ex could come at further detriment to the national flock numbers, and that a brief price bump may not be enough to encourage producers back into the game.
Federal Agriculture Minister Barnaby Joyce was quick to claim reopening of key Middle Eastern live markets as the driver behind the price increase. After a hiatus of more than four decades, the Minister announced the resumption of live sheep trade with Iran just last week. Trade with Egypt was resumed in March and with Bahrain at the end of February.
“Since the resumption in trade with these key markets, sheep prices in WA have risen by more than $34 per head… according to Meat and Livestock Australia (MLA) data,” Mr Joyce said.
“At the end of February saleyard sheep prices in WA were sitting on $54 per head, as at 30 May they are now $88 per head. This is fantastic news,” Mr Joyce said, reiterating once again the Coalition’s mantra: “we are open for business”. At the end of May last year WA sheep prices averaged $56 per head.
Responding to a query in question time about diesel fuel rebate rumours, Mr Joyce responded: “You would think they (Labor) would ask a question (instead) about moving 1.3 million head of live sheep and that, since we have signed off the Bahrain agreement, the price of sheep has gone up… an extra $12,000 per semi load or up to about $36,000 per semi load.”
Sustained price lift needed
A sustained substantial price increase would be necessary to rebuild flock numbers despite the sweetener of new markets, as a run of rough prices has already driven many sheep producers to other industries.
Ex-Wickepin Merino producer Greg Matthews said he is a farmer through-and-through, but bad prices left him with the tough decision to leave his 108-year-old family farm.
"It was the toughest decision I have had to make," he said.
"Farmers need to be getting $150 to $200 a head and have a five-year contract to be profitable."
In terms of new markets and building up flocks, Mr Matthews said farmers can't keep producing at buyer costs.
"Opening new markets might just be a short-term benefit, but the bottom line is we need more money for our farmers," he said. "If I was making money out of farming, I would never have left it. The price they offer us is just not enough."
Western Australia Farmers Federation president Dale Park said sheep numbers had almost halved in the past 20 years, and he hoped this news would be a boost to encourage producers back, especially in WA.
"(Iran markets) will mean more pressure on sheep prices upwardly," Mr Park said. "It's very welcome news."
Kojonup farmer Kevin Matthews, who runs more than 4000 breeding ewes, said farmers needed more options and markets available, so they could pick a better price.
"If you have only one to two markets, it doesn't give you much of a choice," he said. "They can hold us to ransom when they want to, so the more competition the better."
Mr Matthews said things needed to change - and farmers need to get more than they have been getting.
"The poor old farmer gets nothing," he said. "If the prices go up, we will build up the numbers, but these things (opening markets) take time, and it's a while off the first shipment."
Reducing export could halt flock decline
A report produced by the WA Department of Food and Agriculture in 2009 - The Disappearing Flock - warned that focusing on live export was not sustainable for the industry long-term. An upward trend in live trade reflected almost constant annual exports from a declining flock, said report author Kimbal Curtis, and reducing slaughter and live export percentages would be necessary to arrest further decline.
Data from the Australian Bureau of Statistics showed the national sheep flock at 76.9 million head for mid-2008, the lowest it had been since 1916. From 1990 (when there were 170 million head) to 2008 the flock declined 55pc, or by around 4 million head per year. As at June 2012, the national flock stood at 74.7 million head, with 14.4 million in WA.
In 2013, Australian live sheep exports totalled 1,973,418 head - back 13pc on 2012 - and were valued at $172 million according to MLA. The Middle East accounted for 98pc of Australian live sheep exports for the year, with Kuwait again the largest market at 876,004 head, up 24pc on 2012. The largest export state for live sheep in 2013 was Western Australia, shipping 1,634,363 head, valued at $139 million, followed by Victoria (267,455 head), and South Australia (61,126 head).
New markets 'a major win'
While the Greens, RSPCA and Animals Australia have decried the “rush” to re-enter markets closed due to welfare concerns as irresponsible, Mr Joyce said he had high expectations for the reopened live markets.
“I fully support the live exports trade, the trade contributes significantly to the Australian economy and it’s just so important to our farming families,” he said.
“New markets are not just great news for our sheep producers; they’re also good news for our cattle producers and cattle industry.”
Australian Livestock Exporters’ Council (ALEC) CEO Alison Penfold and Sheepmeat Council of Australia CEO Kathleen Ferme said the Iran deal was a major win for producers "a long time in the making".
According to industry figures, in the late 1960s to early 1970s Iran was the largest importer of Australian sheep, taking more than 3 million head.
Ms Penfold said industry sees strong potential for the Iran market to reach back around 1 million head of sheep a year.