Options limited for sheep farmers

The three-month live sheep export moratorium for the Northern Hemisphere summer came into effect on June 1. 

This means there are no sheep sent to live export.

And with space at Western Australian processors at a premium, there are limited options for producers to turn-off their sheep.

Before the live export moratorium, the annual proportion of total turnoff into live export ranged between 30 and 40 per cent. With the introduction of the moratorium, this proportion dropped to around 20 per cent in 2018 and 2019, and then has drifted toward 10 per cent more recently.

In 2022, about 496,000 head were sent for live export, which was 11 per cent of total turnoff that year. Volumes were even lower in terms of options to transport to the eastern states at 368,000 head, or 8 per cent of total turnoff.

Strong demand for sheep from the east during 2020 to restock after the 2019 drought, particularly from NSW producers, led to a spike in annual flows from west to east, to 1.9 million head, or about 30 per cent of WA turnoff that year.

But the option to send east isn’t something that can be relied upon every season; it needs a decent price discount from west to east in order to make the transport costs work out. Historically, prior to 2020, the 10-year average of proportion of sheep sent west to east was about 5 per cent of total WA turnoff per year.

During the past decade, including 2022, the average proportion of turnoff from west to east was about 8 per cent.

In 2022, 81 per cent of WA’s sheep turnoff was processed locally, the highest recorded on an annual basis. This underscores the importance of getting the processing sector running smoothly in WA, especially with regards to processing capacity and labour, so that the planned phase out of the live trade doesn’t jeopardise WA sheep farmers.

The Western Australian Department of Agriculture monthly data on sheep transport volumes from west to east was updated recently (end April 2023). It demonstrates that, while there has been an increasing trend to the flows for much of 2023, the monthly volumes sent east have been below the average seasonal pattern.

April 2023 was the first time this year that we have seen numbers ahead of the average trend (according to the past 10 years of flows). There were nearly 38,000 head of sheep sent to the east in April, which is 16 per cent above the 10-year seasonal trend, so perhaps the limited turnoff options and large price discounts in the west are beginning to encourage more shipments to the east.

Monthly volumes sent east in the first quarter of 2023 are similar to those reported in 2022, which ran about 60 per cent below the 10-year average seasonal trend.

Up to end of March 2023 there were 40,470 head of sheep sent from WA to the east, so the flows seen in April 2023 alone have nearly matched the first quarter transport totals.

A comparison of WA sheep processed locally versus transport to the east or into the live export sector for quarter one of 2023 shows that 86 per cent of turnoff has gone into the domestic processing sector in WA. If this ratio stays as elevated as this all year, it will make 2023 the record holder for most sheep processed domestically in WA, beating the 81 per cent achieved in 2022.

However, anecdotal reports from WA farmers suggest waiting times to get a booking at WA abattoirs are extending toward two months, so capacity to process locally remains a problem.

About 11 per cent of WA sheep have been turned off to the live export sector so far in 2023. In terms of sheep transported east, during January to March this year, just 3 per cent have been trucked across the Nullarbor, which is down from the 8 per cent sent east during 2022.

If WA processors are unable to increase their capacity to meet the demand and the east isn’t always an option for turnoff, where does that leave WA producers? To get out of sheep entirely?

• Matt Dalgleish is co-founder and director of Episode 3 (EP3)