The Compass last looked at the size of the WA sheep flock two years ago in the article PeakSheep – noting the steady decline in sheep numbers from the nineties’ peak.
DPIRD recently released its latest Sheep industry turn-off update which highlights that, after a brief plateau in the 2010s, the gradient of the count curve has switched from flat to steep. Not quite a free fall but, if it was a ski slope, it would be graded double black diamond.
To provide perspective, the WA flock size has not been this low since the Great Depression (if you remember that, you would be over 100 years old).
The departing beasts have been destined for the usual spots: local processing, Eastern States shipments and live export, with the DPIRD table below detailing the specifics:
What is most concerning is that the turn-off has been increasing as the flock has been reducing. Lambs that would have been renewing stocks have been waved goodbye, along with many of their mums.
Whip out the calculator and we can see that total turnoff in the years from 2022 to 2024 has increased from 38% of the underlying flock to 69%. Zeroing in on just sheep, if a 10% turnoff rate is considered sustainable, what do we call the roughly 25% turnoff that we witnessed in 2024? Mathematically, either turn-off will screech to a halt to rebuild breeding stock (i.e. limited revenue from sales) or flock numbers must continue to fall further. The latter would seem more likely.
Obviously, sheep don’t pack their bags and venture off farm themselves– farmers have made active decisions to boot them off their paddocks. It will be no surprise to readers that the fundamental reason is economics – from bringing in shearers to basic freight, costs are going up, whilst mutton and lamb prices were higher five years ago.
But arguably the biggest impact is that feeding and watering sheep is becoming harder and more costly with longer and hotter ‘summers’. During the late autumn period, when the focus should be on seeding increasingly large grain crops, many mixed farmers are finding themselves shuttling water from the nearest standpipe and/or picking up feed from a depot. This means the normal round the clock seeding activities demand a bigger clock – or fewer activities. Add in the fact that average grain yields have been increasing along with average grain prices, (compounding the cost of sheep feed), more farmers are picking a winner and going ‘all in’ on cropping.
Of course, increased concentration on any commodity class means increased risk too. If a crop fails, some value can be salvaged by sending in a couple of hundred woollen meat packs to finish it off rather than spending money to spray it out. Other benefits from sheep in farming systems include natural nitrogen, reduced stubble load, disease breaks and weed control – tools that some farmers don’t want to give up completely.
But perhaps the largest risk mitigant is that global meat and wool pricing are not well correlated with grain pricing, and making a bit on the swings when you lose a motza on the roundabout can be the difference between the bank manager sending a Christmas card or a default notice. In short, multi-faceted farming systems build in resilience to the overall model.
Accordingly, it is highly unlikely that sheep will disappear from WA completely. As numbers fall, simple supply and demand is likely to pressure local pricing higher. Price sensitive markets drop away first until an equilibrium is reached at a profitable level for producers. As long as competition and/or substitution does not undermine and replace WA production, a new lower volume, but higher profit paradigm, should establish itself.
But of course, as per the well-worn expression, if there is no risk, there is no return, and WA farmers are well versed on placing bets in risky environments. It remains to be seen if Ovine Delight comes from the back of the pack to give odds on favourite, Just Cropping, a run for its money.
