Australian sheep farms world’s most profitable

Key points:

  • WA sheep farms are the most profitable in the world according to the new agri benchmark report
  • Sheep meat production is growing in China, Central Asia, North Africa and the Middle East
  • Australia is among the lowest cost sheepmeat producers in the world.

MLA today released its annual agri benchmark report — How are global and Australian sheep producers performing? In the report, the costs, productivity and profitability of Australian sheep farms are compared to international competitors in 16 other countries.

From an Australian perspective, six farms across key Australian sheep producing regions participate in the benchmarking activity, including three WA farms that are mixed sheep-cropping enterprises.

On a positive for Australian sheep farms, they are the most profitable in the world according to the report, especially the WA mixed farming properties. These farms are also among the lowest cost of the world’s sheep producing countries – all performing below the global average cost of production (which is US$482 per 100kg live weight production).

The report highlighted that sheep are integral to profitable mixed farming enterprises, however, as with Australian cattle farms, high land prices are putting pressure on sheep farms’ long-term profitability.

Competitors

In the past decade, international sheepmeat production has grown significantly in China, Central Asia and North Africa – most notably in Algeria, Uzbekistan, Chad, Sudan and Turkey. From a demand perspective, in the 10 years to 2019, global demand for sheepmeat grew by 2.2 million tonnes carcase weight (cwt).

Production

Australian ewes rated the highest in the world, with close to 100kg of live weight produced per ewe over their lifetime. The high productivity of Australian ewes is what drives the profitability of Australian farms.

On the other hand, weaning rates among the Australian flock was generally lower than the global average. In some countries like the UK and Ireland, weaning rates of 160% are being achieved.

Costs

Australian sheep farms generally pay less for stock feed compared to global competitors, however, this can be attributed to the fact that half of Australian sheep farms are mixed cropping enterprises that don’t need to buy feed and can feed sheep on crop stubbles.

Australian sheep farms also have higher machinery input costs than competitors. This is explained by the high percentage of mixed sheep and cropping farms in Australia that require costly seeding and harvesting equipment.

© Meat & Livestock Australia Limited, 2021

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