OPINION: Demand for sheep meat is expected to rise and WA producers could be in the box seat.
The Australian sheep industry stands at a critical juncture, with both challenges and opportunities on the horizon.
Two contrasting trends are shaping the future: the decline in sheep enterprises in New Zealand and the anticipated growth in Australia’s dominance in the global sheep meat export market.
With the looming closure of the live sheep export trade in Western Australia in 2028, the focus is increasingly shifting towards the boxed sheep meat trade.
The implications of these trends for Australian sheep farmers, and particularly those in WA, demonstrate that the current exodus from the sheep sector could be a missed opportunity as the global demand for boxed sheep meat is poised to grow significantly.
Between the fiscal years 2022-23 and 2023-24, the sheep flock in NZ declined by 4.3 per cent, with lamb and beef cattle numbers down by 4.8 per cent and 2.8 per cent, respectively.
These figures underscore a broader contraction within NZ’s livestock sectors, particularly in sheep farming, which has traditionally been a cornerstone of the country’s agricultural economy.
Several factors contribute to this decline, including increased competition for land from other agricultural uses, environmental regulations, and evolving market dynamics.
This contraction presents a significant opportunity for other major players in the global sheep meat market, particularly Australia, to fill the gap left by NZ’s reduced export numbers.
The United Nations Food & Agriculture Organization projects that Australia will dominate the global sheep meat trade by 2032, providing nearly 45 per cent of the world’s exports. This is a substantial increase from the current levels and reflects Australia’s growing prominence as a reliable supplier of high-quality sheep meat.
Despite its industry decline, NZ is still expected to hold a 34 per cent share, but the significant growth in Australia’s share underscores the potential that Australian sheep farmers can tap into.
The projections for 2032 align with broader global trends where demand for sheep meat, particularly from markets in the Middle East, Asia, and increasingly, North America, is expected to rise.
WA is uniquely positioned within the Australian sheep industry due to its historical reliance on live sheep exports. However, with the federal government’s decision to phase-out live exports by 2028, WA sheep farmers are faced with a critical decision: adapt to the growing demand for boxed sheep meat or exit the industry altogether.
The current trend in WA suggests many farmers are opting for the latter. This trend, driven by uncertainty over the future of the industry, rising costs, and the perceived difficulties of transitioning to boxed meat production, could result in a significant reduction in sheep numbers in WA. However, this exit from the industry might be a missed opportunity.
Global demand for sheep meat is set to rise, and Australia, particularly WA, could benefit immensely from this trend. While challenging, the closure of the live export trade presents an opportunity to shift towards a higher margin boxed meat production.
WA’s proximity to key export markets in Asia and the Middle East, combined with its reputation for producing high-quality lamb, positions it well to capitalise on this growing demand.
Transitioning from live exports to boxed meat does require investment in processing facilities, cold storage, and logistics. However, the potential rewards are significant.
Boxed meat exports can command higher prices and offer farmers more control over their product. Moreover, with advancements in meat processing technology and increasing consumer demand for traceable and sustainably produced red meat, WA sheep farmers could position themselves at the forefront of the global market.
The future of Australian sheep farming, particularly in WA, is at a crossroads. While the decline of NZ’s sheep industry and the projected growth in global demand for boxed sheep meat present significant opportunities, these will only be realised if WA sheep farmers can adapt to the changing market dynamics.
By investing in the necessary infrastructure and supporting farmers through the transition, Australia can not only maintain but expand its dominance in the global sheep meat market, ensuring a prosperous future for its sheep farmers.
• Matt Dalgleish is co-founder and director of Episode 3 (EP3)
