Australian Natural Resources Atlas

Natural Resource Topics

Agriculture - Sheep/Wool Industry - Australia

Australia

Benchmarking Rural Industries' Practices and Productivity Performance and Review of Industries' Capacity to Change

This project describes the main regional environmental challenges facing the Australian sheep and wool industry and outlines the industry's response to these challenges in terms of changing land management practice. This project provides analysis on a national and industry regional scale and is not intended to have property level uses.

Regional adoption rates of practices are documented and future directions for the industry are proposed. Some of the major environmental challenges for the wool industry such as weeds and exotic pests and the wool industry's position within the inland, southern and western areas of Australia have placed increased pressure on production systems. The cumulative effects of intensifying land use within these landscapes is demonstrating itself by increased weed infestation, habitat loss and increased populations of pests and feral animals

KEY FACTS ABOUT THE SHEEP AND WOOL INDUSTRY

Where are Australian sheep and wool produced?

In 1999, the Australian sheep and wool industry occupied an area in excess of 85 million hectares. These production areas are generally located in the inland, central and southern areas of Australia, and represent one of Australia's major land users.

Sheep and wool production occurs across much of central Australia, but is split geographically into three zones. These zones are:

High rainfall zone
Wheat/sheep zone
Pastoral zone

These zones and the distribution of sheep are represented in the maps below.

Map of sheep regions

How many sheep does Australia's flock include and how much meat and wool do they produce?

Australian Bureau of Statistics (ABS) estimates that sheep and lamb numbers vary annually in response to markets and seasons. An historic trend in national flock size for the period 1987 to 1994 is shown in the chart below.

W2_2

In 1997, ABS estimated sheep numbers at over 120 million, producing in excess of 0.575 million tonnes of wool. The distribution of flock numbers and wool production on a zonal basis is represented in the table below.

Region Sheep Numbers Wool Production (t)
High rainfall zone 38 983 170 180 229
Wheat/Sheep zone 16 455 874 80 086
Pastoral zone 65 259 790 314 335
Total 120 698 834 574 650

A proportion of Australia's sheep and wool is produced from specialist wool producers, producing a wool product only. ABARE have estimated the area of specialist producers within each of the zones, and these are shown in the table below. Further detail of each of the sheep and wool zones is presented in the regional information pages:

Region Sheep Numbers (Specialists) Wool Production (t) (Specialists)
High rainfall zone 17 751 636 82 429
Wheat/Sheep zone 14 225 155 72 173
Pastoral zone 8 874 504 43 834
Total 40 851 295 198 436

In 1998, Australia's sheep reduced to over 117 million sheep and produced 0.62 million tonnes of meat and 0.64 million tonnes of wool across all rural sectors. 31.9 % of Australia's wool and 61.4 % of Australia's sheep meat was retained for the domestic market. The distribution of sheep industry exports by destination, is shown in the charts below.

Wool exports Live sheep export

What land and water resources are invested in Australian sheep and wool production?

The sheep and wool industry is large and diverse, and sheep are reared under widely varying climatic and environmental conditions. Sheep meat and wool are produced on properties that vary in size, management regimes and enterprise mixes. Sheep numbers have reduced over the last decade in response to market conditions and wool stockpile reserves. Sales of the last lots stored in the stockpile reserve were recently negotiated.

Wool and sheep meat is predominantly produced in central and southern regions of Australia, in areas from the eastern coast through inland Australia and into central Western Australia.

In 1999, the key production statistics for the Australian wool industry were:

A summary of the distribution of sheep and wool land use on a zonal basis is presented in the table below:

Region Area (ha) % of Australian sheep area
High rainfall zone 4 690 982 5.5
Wheat/Sheep zone 11 957 240 13.9
Pastoral zone 69 045 822 80.6
Total 85 694 044 100

What are the key characteristics of Australian sheep and wool producers and farms?

In 1998, the Australian sheep and wool industry employed a total of around 28 500 people across more than 15 250 properties. Key characteristics of Australian sheep and wool producers and farms are presented in the following tables. These statistics are further analysed in the regional pages.

Region

Key characteristic

 Industry average High rainfall zone Wheat/ sheep zone Pastoral zone
Age of owner/manager 54 years 52 years 56 years 53 years

Owner/manager education and skill

Completed university/tertiary or trade
Completed 5-6 years high school
Completed 1-4 years high school
Primary or no schooling

31%

23%

38%

8%

33%

21%

37%

9%

30%

20%

41%

9%

21%

39%

35%

5%
Family members working on farm 63 hr/wk 61 hr/wk 60 hr/wk 78 hr/wk
Owner manager work on farm 42 hr/wk 43 hr/wk 40 hr/wk 50 hr/wk
Number of dependent children 1 0.9 1.1 0.6
Farm cash income ($) 12 446 10 402 15 194 10 809
Total farm debt - June 30 ($) 134 698 158 062 105 340 144 011
Farm business profit ($) - 31 183 - 25 761 - 30 060 - 55 218
Total off farm income ($) 19 667 14 960 26 832 10 998
Owner work off farm 5 hr/wk 5 hr/wk 6 hr/wk

1 hr/wk
Area operated - June 30 7 561 ha 899 ha 2 536 ha 49 389 ha

Farm ownership/tenure

Freehold
Long term crown lease		 19%
79%		 73%
11%		 69%
36%		 7%
91%
Employment of non-family labour 19 hr/wk 19 hr/wk 16 hr/wk 30 hr/wk
Landcare membership 47% 57% 40% 34%
Length of group involvement 6 years 6 years 6 years 7 years

Differences and similarities exist in the characteristics of producers across the wool industry. In financial terms, farm cash income does not vary widely across zones, but the average farm debt levels are relatively lower in the wheat/sheep zone and average farm business profit is lowest in the pastoral zone. Average farm business profits are negative across all zones.

In personal terms, pastoral zone producers on average, work more hours in managing properties due to the significantly larger property size in this zone. The difficulties in managing large areas presents some limitations for implementing changes in management practice. Also, pastoral owners work fewer hours and earn less money off farm on average, hence limiting diversification strategies.

Other significant differences between the zones relate to farm ownership/tenure arrangements and landcare group memberships. Pastoral zones have significantly larger areas of land under leasehold title compared to other zones, with on average 91% under leasehold tenure. The effect of tenure on the adoption of management practice is not clear, however the terms and conditions of the leases will influence financial and long term planning decisions.

Landcare group membership is highest in the high rainfall zone. It is expected that areas with a higher participation in 'landcare' learning and information sharing activities are more likely to adopt developing management practices.

Other indices such as age, education level and farm employment rates are variable both within and between zones. It is difficult to draw firm conclusions from these indices due to their variability.

What are the main environmental challenges facing Australia's sheep and wool industry?

A survey of natural resource management undertaken by ABARE in 1999 identified a number of environmental issues affecting the sheep and wool industry. These included:

A review of available literature on the Australian wool industry has highlighted the following issues in environmental management:

The figure below indicates the types of land degradation and the proportion of sheep farms affected by each type. The proportion of regional sheep properties reporting significant degradation (ABARE, 2000) is shown in the two graphs below. The relative standard errors reported in the tables attached to these graphs give an indication of the relative sampling error. The survey is conducted of a proportion of the farms in Australia. A high sampling error figure indicates that only a small proportion of the total farms has been surveyed.

Sheep farms with significant degredation

The average area of Australian sheep farms affected by various forms of degradation is illustrated in the chart below. A significant difference between the zones is that larger areas on in the pastoral zone properties are more severely affected by various forms of degradation.

Average farm area affected by degraded W5_8

What is the Australian sheep and wool industry doing to meet these challenges?

Practice Adoption

There has been considerable growth in organised land management groups in recent years. These various groups address the sustainability of agricultural land use by examining issues such as land degradation, water quality, salinity, soil fertility and feral animal control on a district basis.

Management practices being adopted to address environmental degradation issues include participation in the Meat and Livestock Australia program and utilisation of Sustainable Grazing Systems (SGS). SGS aims to improve farmer's skills in profitable, sustainable pasture and livestock management through the implementation of PROGRAZE courses and follow-up training. PROGRAZE is a 'hands on' grazing management skills course aimed at assisting producers to match pastures and livestock.

Management practices being adopted by wool producers to address the main issues of weeds, water erosion and surface waterlogging, include:

formal vegetation and pasture condition monitoring
exclusion of stock from degraded areas
weed eradication
the use of perennial pastures
maintenance of vegetation along drainage lines
monitoring of water tables

The national adoption of these practices varies as shown in the graph below.

National sheep farm management and practice applicability
Industry strategic planning

The Sheep-meat Council of Australia Inc. has prepared a strategic plan for the Australian sheep-meat industry to the year 2005. The document provides a summary and interpretation of information obtained from industry stakeholders, and is divided into five main sections:

major influences on the Australian sheep-meat industry
a strategic focus for the industry
industry goals for the lamb, mutton and live sheep export industries
initiatives required to achieve theses goals.

In drafting this Strategic Plan, the Sheep-meat Council of Australia provided sheep producers with the opportunity to give their advice on the initiatives the industry as a whole should pursue with levy funds, and to establish some understanding of industry priority. The Strategic Plan has been presented to the three organisations delivering levy funded services for the sheep industry (Meat and Livestock Australia Ltd, The Australian Animal Health Council Ltd and the National Residue Survey) who will develop, implement and manage programs to achieve the outcomes identified.

The Sheep and Wool Council of Queensland (SWCQ) prepared a strategic plan for the Queensland Sheep and Wool industry in March 1996. The plan was to be the focus for action to achieve agreed industry goals for the next 5 to 10 years.

The plan has identified actions most likely to improve the profitability of wool production in the long term. These actions include increased demand and market prices, improved production efficiency and improved marketing efficiency.

Some of the environmental issues identified in the strategic plan to promote sustainable production, include:

resource management (ie. land and water management)
adoption of best management practices to assist in the development of sustainable profitable production (including the involvement of grower groups where appropriate)
pest and disease management
minimising the adverse effects of chemical residues.

Codes of practice

A specific sheep/wool industry Code of Practice is not in effect. The industry primarily relies on the adoption of best management practice as promoted by research and development initiatives and identified in various strategic plans.

The industry is supported by a network of structures and organisations. These structures support the industry in areas such as marketing, infrastructure and research and development. Supportive bodies include peak bodies, government agencies, beef marketing organisations and R & D institutions. A summary of this structure is presented below.

PEAK BODIES GOVERNMENT

Australian Wool Innovation

Australian Wool Exchange

Australian Wool Testing Authority
Wool International

Wool Council of Australia

 Commonwealth Scientific and Industrial Research Organisation
Department of Agriculture, Fisheries and Forestry
Australian Quarantine and Inspection Service
Australian Bureau of Agricultural and Resource Economics
Bureau of Rural Sciences
Various State Agricultural Departments
RESEARCH AND DEVELOPMENT SHEEP MARKETING ORGANISATIONS
The University of Western Australia
The University of New England
The University of New South Wales
The University of Adelaide
South Australian Research and Development Institute
Rural Industries Research and Development Corporation		 Australian Wool Innovation
Research and development

The main research and development (R & D) bodies associated with the sheep and wool industry are:

Woolwise (previously the Cooperative Research Centre for Premium Quality Wool) - involving the Woolmark Company, CSIRO, WA Department of Agriculture, University of WA, University of New England, University of NSW and University of Adelaide
Australian Wool Research and Promotion Organisation (AWRAP)
Meat and Livestock Australia (MLA)

Woolwise (1993 - 2000)

Woolwise has undertaken works in the areas of genetic engineering and wool quality improvement.

Australian Wool Research and Promotion Organisation (AWRAP) (1993 - 2000)

AWRAP was established by the Australian Wool Research and Promotion Organisation Act in 1993.

The AWRAP Act gives the organisation responsibility for:

generic promotion of the use of wool and wool products both in Australia and overseas, and
investigation, funding, evaluation, dissemination, adoption and commercialisation of research and development relating to the wool industry.

AWRAP funds woolgrower groups to trial specific practices that can improve profitability. These are practices that growers themselves have identified as barriers or constraints to their profitability. Funding is also provided to grower groups wishing to explore improved wool marketing practices.

Over 2 500 wool growers are now involved in six major programs which seek to deliver improved on-farm practices. These are:

Bestprac - an exercise aimed at identifying management practices to improve operations
PIRD - Producer Initiated research and Development - run in conjunction with Meat and Livestock Australia (detailed below)
Paired Paddock Program (Triple P) - trialing of pasture and farm management improvements in southern Australia
Focus Farms - on-farm R & D on two AWRAP/CSIRO owned farms
Woolpro - trialing of pasture and farm management improvements in Western Australia
Bestwool 2010- a program aimed to improve farm profit and productivity.

AWRAP is directed to develop and implement monitoring and education programs to improve the quality of Australian wools by reducing chemical residues. In doing this, AWRAP must take account of the need to further the sustainable use and management of natural resources.

In 1998/99, AWRAP had an income of $96 million derived from the Wool Tax, the Government and Licence fees. Total expenditure for the year was $38 million, with $22 million being spent on research and development projects in Australia and $22 million spent on operations and services. AWRAP also contributed $73 million to the Woolmark Company.

Meat and Livestock Australia

MLA initiated the Producer Initiated Research and Development scheme (PIRD) in 1993. Under the scheme, producers can apply to the MLA for funds of up to $10 000 per project to support improvement in efficiency and profitability of their farm business through on farm research and development.

Eighty grower groups are undertaking R & D on their farms to improve wool quality and increase productivity.The PIRD program enables growers to tackle significant regional issues which otherwise might not be addressed.

How are Australian sheep farmers working with other agricultural industries to overcome environmental challenges?

Sheep and wool produced in the high rainfall zone and wheat/sheep zone, and to a lesser extent in the pastoral region, generally form either part of mixed farming systems or mixed farming regions.

In high rainfall zone, sheep and wool are produced alongside the intensive sugar, dairy and horticultural industries and the beef industry. This zone supports only a small percentage of the sheep and wool industry (5.5%), but producers in the zone need to manage their enterprises cooperatively.

In the wheat/sheep zone, sheep and wool are produced alongside the intensive cotton, grains and horticultural industries and the beef industry. This zone supports about 14% of the sheep and wool industry and producers in the zone need to manage their enterprises cooperatively.

The major production region for the sheep and wool industry is the pastoral zone (80%). This zone supports only limited areas of intensive forms of agriculture, and these areas are generally limited to minor supplementary feeding arrangements. Recent feasibility assessments for the expansion of the cotton industry into the zone have been examined, but with no final determination. Some of the pastoral areas operate cooperatively with the beef industry.

Historic environmental issues that have the potential to impact on regional environmental values and sheep and wool production levels where mixed industries exist include

containment of herbicides through spray drift and runoff mobilisation
runoff coordination affecting erosion rates and water flow pattern
control of woody weeds and feral animal populations
pasture decline increasing wind erosion rates
habitat decline from large scale clearing
emerging salinity and acidity in some regions

The resolution of these issues on a regional level requires ongoing research and development. The sheep and wool industry is involved in the agro-political planning processes through peak bodies, Landcare groups, catchment management bodies and local authorities. Through these organisational structures, they are working with other rural industries to manage the environmental effects and have input into industry codes and BMP's. Wide environmental community concerns such as water quality, protection of biodiversity and use of land according to capability are considered through similar structures.

An example of a joint livestock industry response to a common regional issue is in the Western Division of New South Wales. In this region, beef and wool producers are confronted with similar environmental challenges that stem from the integration of their production systems into landscape systems. Native population grazing pressures (eg kangaroos), combined with pest populations such as rabbits, woody weeds and foxes, affect the production capacity of the pastoral systems to maintain adequate feed sources. In response, landholders in this region prepared a set of best practice guidelines on Total Grazing Pressure (TGP) that includes both production and landscape function related management responses. Key elements of these are:

Wool and sheep meat are produced alongside the intensive sugar and horticultural industries and the beef industry. This zone supports only a small percentage of the sheep and wool industry (5.5%), but producers in the zone need to manage their enterprises cooperatively.

How do these factors affect the future prospects of the industry?

The sheep and wool industry is a rural industry that faces a number of developing and expanding environmental challenges. These challenges are expected, as the industry is a major user of land resources in a fragile landscape. The developing salinity, woody weeds, vegetation management and degraded soils issues will require evaluations of the effects sheep and wool management practices have on wider landscape processes. The adoption of currently recommended management practices may require on-going development to respond to regionally specific issues and to emerging issues. In some of the more badly degraded areas, re-vegetation may be required, or at the very best, a change in farming system to better incorporate the landscape requirements of the fragile pastoral areas. These changes will /should be determined by the degradation process occurring. Failure to do so will result in the progressive decline in utility of the resource base for the sheep and wool industry. The sheep and wool industry worked its way through a period of uncertainty as a result of the market effects stemming from stockpile related oversupply of product. The challenge will be to manage the effects of this period and to progressively institute the necessary changes in an inclusive regional capacity building approach.

Further information

Link to Map maker to make a map using this information.

Link to data available for download on "A spatially consistent sub-set of agricultural statistics (AgStats) data 1982/93 to 1996/97"

"Benchmarking environmental challenges and agricultural practice - an overview" report. Summary

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