01/12/2023
This case study first appeared in the Summer 2023 edition of Meat & Livestock Australia's Feedback magazine.
Research was commissioned to understand the economic contribution of the live sheep export trade in WA, as well as nationally. The economic analysis was carried out by the Livestock Export Research, Development and Extension Program, a collaboration between LiveCorp and MLA. History of live export
The start of the sheep trade from WA to the Middle East in significant numbers can be traced to the 1940s and 1950s. There has been significant investment since then by exporters and importers in ships, farms, feedlots (in both Australia and importing countries) and pellet mills.
The trade provides a valuable marketing option for producers, particularly in times of high turn-off such as drought. Live exporters tend to select sheep not favoured by processors, so it is more flexible than the prime lamb market in terms of age, quality and timing of delivery. The trade also complements the state’s mixed farming systems. Economic analysis
In 2021–22, live sheep exports accounted for 17% of WA sheep turn-off and provided $71 million in value added to the WA economy.
In recent years, industry initiatives, regulatory changes and research have meant significant improvements in animal welfare, with record low average mortality rates for sheep shipments of 0.14% in 2022. This equates to about one-sixth of the average rate in 2010.
The economic study found the annual value of the trade was $143 million, based on a five-year average (2017/18–2021/22).
Nationally, live sheep exports supported 320 full-time equivalent workers directly and indirectly in post-farm-gate positions, with 249 of those in WA.
The report noted a range of factors contributing to a drop in the number of live sheep exported from Australia in recent years.
These include:
regulatory changes
good seasonal conditions across the country causing an increase in the transfer of sheep from WA to the eastern states
a shift to cropping influenced by relatively high grain prices
the high price of Australian sheep relative to international competitors
impacts associated with the COVID-19 pandemic.
If live trade were to cease, it’s estimated the potential value of a Merino wether (the type of sheep most commonly exported) could drop 19.19% or by $21.84 per head. If the cessation occurred during a period of high supply and low demand, the price response would likely be more pronounced, potentially as high as 32.90% or $37.44.
The five major importers of Australian sheep are Kuwait, Israel, the United Arab Emirates, Oman and Jordan, accounting for 92% of the total live sheep trade in 2022. Although they also buy sheep from other countries, many customers have a preference for Australian sheep because of their quality and disease-free status.
All five countries are highly dependent on imports for food security. The analysis also highlighted they are more likely to import live sheep from other countries than directly replace Australian sheep with processed sheep meat. This supports claims that the importance and requirement of live sheep in the Middle East are ingrained in culture, religion and tradition.