In Australia and New Zealand we are witnessing a once-in-a-lifetime change in the sheep industry; a shift from fibre to protein production, driven mainly by increasing costs and labour shortages.
Challenges & Solutions
In the last 18 months I have travelled to all of the sheep producing states in Australia a number of times, meeting with merino breeders and lamb producers to identify the important economic issues within the sheep industry. I have just returned from a 3 week study tour of New Zealand where I had the opportunity to meet with large and small lamb producers to gauge their expectations for the future.
Breeders have had limited options to simplify sheep management because quality shedding rams have not been available in large numbers. In New Zealand, a large percentage of the overall ewe flock used for lamb production has low quality wool that is very costly to manage. The concept of having a completely non-shearing breeding ewe flock is extremely appealing commercially. This is the next big economic step to increasing producer margins.
In the last 50 years, I have seen three major events within the sheep industry in Australia, which have affected financial viability of the sheep producer:
1. Establishment of the Reserve Price Scheme and the Wool Corporation in the 70s
2. The collapse of the Wool Corporation at the end of the 80s
3. The current move from fibre to protein production to increase financial margins for sheep and lamb producers.
In the next 5 years, the opportunity exists in Australia and New Zealand for sheep producers to change their sheep farming model. We are well placed to benefit from the global protein shortage and rain fall pattern changes that are clearly occurring.