IBISWorld Market Research
Historically high input prices have made it too expensive for many farmers to keep large flocks.
Melbourne, Australia (PRWEB) March 28, 2014
Operators in the Sheep Farming industry in Australia have faced mixed conditions over the past five years. According to IBISWorld industry analyst Brooke Tonkin, “waning industry revenue early in the period was followed by strong revenue growth in the subsequent years, as the long-standing drought finally broke.” Industry revenue is expected to grow at an annualised 5.1% over the five years through 2013-14, on the back of the industry's recovery. The rapid revenue growth that occurred as the rains returned has levelled out over the past two years. In 2013-14, industry revenue is expected to grow by 3.4%, to reach $3.3 billion.
Australia is home to over 74 million sheep, with wool production historically forming the largest portion of industry revenue. However, many farmers shifted production away from wool in favour of meat processing over the past five years. “Historically high input prices, particularly for wheat feed and fuel, have made it too expensive for many farmers to keep large flocks,” says Tonkin. Consequently, turnoff rates have been at their highest over the past five years, particularly in 2008-09 and 2009-10. The latter year saw the nation's sheep flock fall to 68.1 million, its lowest level in over 100 years. The return of solid rainfall in 2009-10 enabled many farmers to focus on rebuilding their flocks.
Despite rising turnoff rates, wool has remained the industry's largest source of export revenue. The Sheep Farming industry has benefited from rising demand from Asian markets, particularly China. Dramatic increases in the price of wool in 2010-11 and 2011-12 helped the industry perform particularly well, driving revenue above $3.0 billion for the first time in six years. Overall, wool prices have recovered from the depths of 2008-09 and helped boost sheep farmers' profit margins. The industry's performance over the next five years will be largely determined by external factors, primarily weather conditions. Continuing high prices for lamb and wool will bode well for industry revenue. Ongoing growth in China's textile industry will fuel demand for wool exports. However, the industry's positive demand factors will amount to little should El Nino weather patterns return over the next five years. The industry exhibits a low level of concentration, with no major players.
For more information, visit IBISWorld’s Sheep Farming report in Australia industry page.
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IBISWorld industry Report Key Topics
This industry consists of farms that are primarily engaged in sheep farming. Sheep are farmed for their meat and wool.
Industry Performance
Executive Summary
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Current Performance
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