Research Report

Analysis of domestic fundamentals influencing the national flock

Brief summary

Sheep farmers in Western Australia (WA) have traditionally relied heavily on wool and the live export of Merino wethers for their income. WA producers supply more than 80% of sheep exported live from Australia, and there are fewer alternative markets than in the southern and eastern states.

This phase of the project examined the trends and the factors influencing decision-making on farms, particularly in Western Australia, to identify the risk of uncertainty about the future of the live sheep trade in recent years encouraging a shift away from sheep breeding toward planting crops.

It found the introduction of new regulatory measures has moved the live sheep export industry to a more stable footing, providing farmers with greater assurance of being able to access the trade and more confidence to make business decisions.


This project aimed to create a series of reports to:

  • Identify the economic benefit that flows from the live sheep export trade to farmers and other businesses in Australia (report here)

  • Provide an economic analysis of the industry’s self-imposed three-month moratorium on exporting sheep to the Middle East in the northern hemisphere summer (report here)

  • Provide an analysis of farm-level decisions which influence the size of the sheep flock nationally and in Western Australia (this report).

Key findings (phase 3)
  • The national sheep flock has been in a declining trend since 1990. The forecast of 63 million head in 2020 would be the lowest level in 100 years.

  • Between 1990 and 2010, the decline in the number of sheep nationally correlated to an increase in area planted to winter crops. These numbers have largely stabilised at a national level.

  • There has been a significant shift toward sheepmeat, away from wool production, with lamb rising from around 45% to 70% of turnoff nationally between 2003 and 2010.

  • In WA, there is a risk of continued movement away from wool/sheepmeat production into cropping. Factors include consistency and reliability of prices and access to markets and services such as shearers. Greater certainty over the future of the live sheep export trade is expected to provide more confidence to continue producing sheep.

Benefits to industry

Understanding the factors influencing the decisions made by farmers about whether to continue producing sheep or switch to grain, provides industry and government with more information about the potential impact of policy changes.

Analysis of domestic fundamentals influencing the national flock
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