Australian wool production is set to fall to its lowest level in more than 100 years by mid-2025.
The wool industry is facing pressure on numerous fronts, including poor wool prices and low returns, and competition for land use from cropping and meat production.
The Australian Wool Production Forecasting Committee (AWPFC) has forecasted a 12 per cent drop in production for the 2024-25 financial year to less than 280 million kilograms.
In a concerning sign for the industry, wool production has not been that low since 1920-21.
Australia’s sheep flock size peaked 1970s at around 180 million but has dropped to 63.2 million. (ABC News: Jon Daly)
At the same time, the number of sheep shorn is expected to fall 11.7 per cent nationally to 63.2 million.
To put that in perspective, Australia’s sheep flock peaked at around 180 million in the 1970s.
Farmers unsurprised, frustrated
Western Australia is the worst hit state, where both sheep shorn and wool production are forecast to fall 18.8 per cent.
Legislation also passed federal parliament this year banning live sheep exports by 2028, which have been an essential market for WA farmers.
Kojonup farmer Steve McGuire said the drop in production was unsurprising and was anticipated by the industry when the ban was announced.
Steve McGuire says the ban on live sheep trade was “the straw the broke the camel’s back”. (ABC Rural: Kit Mochan)
He said the looming live sheep exports ban had hurt industry confidence.
“It’s just frustrating — we knew the ban would precipitate a reduction in wool growing,” he said.
“It’s probably the straw that broke the camel’s back.”
Mr McGuire said the industry needed to do more to support and market itself.
Steve McGuire says most farmers were make about $9–10 dollars per head after shearing and labour costs. (ABC Radio Brisbane: Jessica Hinchliffe)
“The price of wool is not far off where it was 10 years ago,” he said.
“Either we need to start producing it at a lower cost, or we need to get more money for it.”
Mr McGuire said a reduction in wool production in WA could see the end of wool sales in Fremantle, which may be forced to move east.
Some WA producers think wool sales in Fremantle may head east next year. (ABC News: Cara Jeffery)
He said with a dropping wool price and the live export trade ending, a growing number of WA wool producers were turning to cropping, which offered better and more consistent returns.
“How much time and effort do you want to put in? When you can put time and effort into growing crops,” he said.
‘Prefer to drive a tractor’
AWPFC chair Stephen Hill said poor pricing, political decisions and tough seasonal conditions in many areas had led producers across the country to sell off sheep in huge numbers this year.
“We know that margins are tight at the moment for wool producers,” he said.
Many farmers in WA are turning to cropping over sheep. (Instagram: @the_wheatbelt_stocky)
“Sheep slaughter rates for the July to September period are 28 per cent more year-on-year, which is a whopping 66 per cent higher than the five-year average.”
Mr Hill said low returns, coupled with the huge amount of labour involved in wool production, were pushing people to change enterprises.
“With the effort and workload with wool production, some people — and especially the new generation — would prefer to sit on a tractor than the 365-day maintenance of a sheep flock,” he said.
He said it was hard to see an upside for the industry in the short term.
NSW and Victoria have the largest sheep populations in the country. (Source: AWI)
“But normal supply and demand dynamics would say that at a certain stage, the wool price should rise,” he said.
Pricing structure outdated
Wool Producers Australia general manager Adam Dawes said while a drop in production was expected, the numbers were still “confronting”.
“To see the actual figures come out in black and white has come as a bit of a shock — it’s rather depressing,” he said.
Mr Dawes said despite consumers paying more for some wool products, the money was not making it to the pockets of wool growers.
“If we take, for example, a high-end merino T-shirt that might retail for $100 — there’s only about $2 worth of wool goes into that,” he said.
“So someone is making a substantial amount of money along the way and it certainly doesn’t feel like it’s wool growers.”
There are concerns a drop in wool production will hurt people and businesses in country towns. (ABC Rural: Fiona Breen)
Mr Dawes said the industry’s pricing structure needed to change with the times.
“I think we do need to embark on a process of having some industry-wide discussions around changing industry structures and the way that industry services are delivered,” he said.
“There really does need … some cohesion and some collaboration to make sure that we’re all working together for the common good, which is increasing our profitability — and hopefully with that, attracting more growers to grow more wool.”
