Domestic sheep production: MLA analysis shows Aussies on top

New research shows that our domestic sheep industry is benefiting from low production costs and is the envy of the world.

Low costs of production are driving Australia’s sheep industry to be one of the most profitable in the world.

Research released by Agri Benchmark, an international group of industry experts, rated Australia’s producers as some of the most profitable out of the major sheep producing regions including South Africa, South America and Europe.

This in turn allowed Australian sheep meat to dominate exports globally according to analysis of the report for Meat and Livestock Australia.

This was in stark contrast to European countries which the report showed “would not generate a profit without government support”.

“Australia remains a low-cost sheep meat producer, with average costs well below the global AB farm average,” the report’s authors Lucy Anderton and Peter Weeks said.

“Australian farms have lower costs for feed, labour (due to efficient usage despite high wage costs), land and capital.

“Overall, Australia’s generally stable and above average farm profitability are a result of the country being one of the most efficient, diversified and low-cost producers of sheep meat in the world.”

The analysis showed the case studies used to monitor Australian cost of production were well below average for five of the six operations studied, with one Victorian producer’s cost of production just US$178/100 kilograms of sheep meat compared to the global average of US$491/100 kilograms.

On the production side, a NSW operation achieved the highest livestock production per ewe in the world at 90 kilograms of sheep meat per ewe last year.

Sheep Producers Australia chief executive Bonnie Skinner said the industry was enjoying one of the strongest if not the strongest eras ever seen but producers should not rest on their laurels.

“Traceability and objective measurement technology advances are both key components in helping producers increase their profitability,” Ms Skinner said.

“National traceability reform will ensure livestock traceability can evolve and meet future biosecurity and market access requirements as well as unlock productivity gains throughout the supply chain.”

Ms Skinner said the success of Australia’s sheep meat industry was “inextricably linked to Australia’s capacity to export”.

“Producers should have confidence in the medium to long-term profitability of the industry, supported by the ongoing demand for sheep meat globally,” she said.

“This is principally driven by consumer demand within China and the Middle East, but also by expanding food service demand in the United States and Europe.”