Sheep intensions survey points to ongoing decline in confidence in industry

Australian sheep producers’ confidence continues to be impacted by broader climatic and market conditions, according to the latest Sheep Producer Intentions Survey (SPIS).

The report, released by Meat & Livestock Australia (MLA) and Australian Wool Innovation (AWI), showed sentiment has improved among sheep producers since the last survey in October 2023, with sentiment rising by 46 points to a nett sentiment score of +4, with this result attributable to improved commodity prices over the summer.

However, wool producers recorded a more pessimistic opinion of the industry compared to the last survey, down 9 points to a nett sentiment of -24.

This was due to producers considering potentially worsening weather conditions in Victoria, Tasmania and South Australia.

Despite sheep producers recording an increase in sentiment compared to the most recent survey, this is well below the result recorded in May 2023 of +27 nett sentiment.

According to Manager for Market Information at MLA, Stephen Bignell, there are several factors that led to this survey result.

“Price volatility, inconsistent weather and various political discussions have had a varied impact on producer sentiment across the country. Producers in Queensland (+33), NSW (+21) and Victoria (+12) had positive outlooks for the industry, while producers in South Australia (-1), Tasmania (-5) and Western Australia (-64) had negative outlooks,” Mr Bignell said.

“It is evident from the feedback provided and analysis undertaken that producers around Australia are feeling pressure from a range of factors, and some regions are experiencing this more acutely.

“Feedback was sought from producers over the period 1 May to 3 June 2024. During this period, the Australian Government announced that it would introduce legislation to phase out the exporting of live sheep by sea by 2028.

“This has had an impact on sentiment not only in Western Australia, but in other states as well.”

'Bad government policies' play part in sentiment decline

“There are a number of reasons for the decline in both wool industry sentiment and forecast flock numbers including continued low prices for wool, increased input costs, seasonal conditions and bad government policies,” WoolProducers Chief Executive Officer Jo Hall said.

“It is absolutely no coincidence that Western Australian producers are predicted to reduce their flock numbers in the face of the unconscionable policy and subsequent passing of legislation of banning the live sheep export trade,” Ms Hall said.

“This government is removing a viable trade and reducing competition in the sheep industry, making it less viable to raise sheep in the west which in turn will have a national impact on the sheep industry.

“While proponents of the ban will continue to say that it doesn’t come into effect until 2028, what they won’t acknowledge is the immediate and material negative impact that this decision has had on confidence of the industry, which has now been proved through this SPIS.

“The Labor government should hang their heads in shame.”

Breeding ewes and wethers in focus

The May 2024 survey had a specific focus on understanding the profile of Australia’s breeding ewes and wether flocks. Of the estimated 47 million breeding ewes on hand, Merinos (61%), prime lambs (15%) and first cross (12%) are the dominant breed types on hand, accounting for 88% of the total breeding ewe flock.

At the producer level (when considering each producer equal), there is more conservative planning than in previous surveys with:

• 22% indicating they would increase their breeding ewe flock size;

• 36% indicating it would remain unchanged; and,

• 42% indicating they would decrease their breeding ewe flock size.

Mr Bignell noted that the intention to reduce breeding ewe numbers was strongest in Western Australia.

“Western Australian producers are forecasting a decrease in breeding ewe flock numbers in the next 12 months, a result which may have ongoing impacts for the national flock,” Mr Bignell said.

Producers were also asked their total numbers of wethers and lambs (excluding ewe lambs and hoggets intended for breeding). As of April 30, 2024, producers recorded 8.6 million wethers and 14 million lambs.