Australia experiences biggest drop in sheep numbers in 10 years

Restrictions on sheep movements into South Australia, due to Ovine Johne’s disease, will be lifted as national numbers drop substantially.

• Sheep returns shine
• Wool clip limited by drought

Australia’s sheep flock is forecast to experience its biggest year-on-year drop in more than 10 years.

It comes as mutton prices hit never-before-seen levels, with the national indicator breaking through $6 a kilogram last month for the first time.

National lamb prices are also extremely strong and are 40 per cent above year-ago levels, with the saleyard trade lamb indicator hitting a historically high $8.88 a kilogram.

In a bid to help South Australian farmers make the most of these high prices, restrictions on sheep movements from across the border, that were in place due to the wasting disease Ovine Johne’s, will be lifted by the state government.

The longstanding restrictions restricted South Australian farmers from buying sheep in Victoria and New South Wales and bringing them into the state.

Primary Industries Minister Tim Whetstone said while recent rains had been encouraging for some farming areas but there was still a long way to go before the livestock industry was out of drought.

“However, now is the time to plan for recovery,” he said.

“We will be tearing down the last Ovine Johne’s disease movement barrier, and from July 1 farmers will find it easier to source sheep from interstate to boost the size of their flocks.

“The dry conditions experienced both here and in the eastern states means there will be limited availability of sheep for restocking purposes once conditions improve, so now is the time for farmers to lay plans to boost the size of their flocks.

“Without this reform, our local sheep and wool industry would be at a significant disadvantage to eastern states’ farmers who would be free to buy the cream of our flocks while South Australian farmers would have been shackled in trying to source from interstate.”

Livestock SA President Joe Keynes said freeing stock movements up would assist producers as they started to recover from the dry conditions.

“We are aware that approved vaccinates and stock from areas with a low Ovine Johne’s Diseases risk prevalence will not only be in limited supply when seasonal conditions improve but will also increase in price,” he said.

“As the National Sheep Health Declaration remains mandatory for all sheep movements into or within South Australia, producers will need to need to consider how to adapt their on-farm biosecurity and disease management strategies in line with these new arrangements.

“The One Biosecurity program, I believe, provides a valuable tool to assist producers with managing Ovine Johne’s disease into the future.”

National sheep numbers are forecast to drop 6.8 per cent this year, the largest year-on-year decline since 2008.

Meat & Livestock Australia’s 2019 Sheep Industry Projections, released this week, show Australia’s sheep flock is forecast to fall to 65.8 million head, down 6.8 per cent year-on-year and the largest year-on-year decline since 2008.

The contraction is being driven by ongoing drought in all key sheep production regions and heightened sheep slaughter, with many producers now running significantly reduced flocks.

Meat & Livestock Australia’s market intelligence manager Scott Tolmie said the combination of generally low lambing rates and a poor weather outlook for winter was expected to disrupt lamb supply in the coming months.

“Throughout 2019, rainfall has been insufficient in all key sheep production regions, compounding the effects of an extended two-year period of rainfall deficiencies,” Mr Tolmie said.

“On the whole, NSW remains the worst affected with 99 per cent of the state still drought-declared and many producers relying solely on supplementary feeding programs to maintain flocks.

“Elsewhere, very few regions across South Australia, Western Australia and Victoria have been immune to the poor conditions. Forming a crucial component of Australian sheepmeat production, the absence of winter rain in these states may lead to a disruption in spring lamb supply, similar to what was experienced in 2018.”

Focusing on demand, Mr Tolmie said the outlook remains positive for the industry.

“Despite the drought, both lamb and mutton prices have reached record highs in the last 12 months,” Mr Tolmie said.

“This has been underpinned by strong demand for Australia’s sheepmeat exports, which continue to push new highs, bolstered by a declining Australian dollar and limited competition.

“The growth in demand, particularly from China and the United States, has translated into strong domestic farmgate prices.”

Mr Tolmie said the forecast drop in sheepmeat production in 2019 should keep lamb and mutton prices historically high throughout the year, with an additional upside possible if improved seasonal conditions spark restocker activity.

“Sheepmeat exports have grown across most markets during the first four months of 2019 with Australian lamb exports to China increasing 22 per cent year-on-year, to 21,000 tonnes shipped weight, while mutton shipments surged 99 per cent, to 22,000 tonnes shipped weight,” Mr Tolmie said.

“Despite an elevated start to the year, exports are forecast to contract throughout the remainder of the year as supply tightens.

“Lamb exports are forecast to finish the year 6 per cent below 2018 levels, at 254,000 tonnes shipped weight, and mutton to contract 9 per cent, to 160,000 tonnes.”