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Better prices moderate sentiment in Australian sheepmeat sector according to survey

09 July 2024

Key points:

• Survey results indicate that sentiment among Australian sheepmeat producers has moderated over the past six months, but several issues are affecting the industry
• Producers have cited the volatility of prices, operating conditions and concerns around the live export ban as contributing to their sentiment in this survey
• Of the estimated 47 million breeding ewes on hand, Merinos (61%), prime lambs (15%) and first cross (12%) are the dominant breed types across the country

Australian sheep producers’ confidence continues to be impacted by broader climatic and market conditions, according to the latest Sheep Producer Intentions Survey (SPIS), released by Meat & Livestock Australia (MLA) and Australian Wool Innovation (AWI).

However, sentiment has improved in the 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.

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), New South Wales (+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.”

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
• 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 30 April 2024, producers recorded 8.6 million wethers and 14 million lambs.

The Sheep Producer Intentions Survey was designed by MLA and AWI to support the industry with reliable data and is used by MLA and the Australian Bureau of Statistics (ABS). It is one of the inputs into the MLA sheepmeat industry forecasting models.

To view the full results please visit: Sheep Producers Intentions Survey May 2024