The recent AWPFC forecast for wool production to be down to levels of the early 1920s (and 2019) warrants a look at what has been happening to sheep flocks in Australia and the other major southern hemisphere wool exporters.
Wool production and sheep numbers are not necessarily
correlated. On a world basis, as the IWTO noted in their Market Information
2024 (read more here) sheep
numbers are up 30% since 2005 while clean wool production is down 9%. The
majority of the world’s sheep do not produce apparel fibre, as the IWTO numbers
show. Merino wool, in the main, comes from the southern hemisphere wool
exporters so for this small group of countries change in sheep numbers tends to
be correlated with change in wool production, although the merino proportion
varies between countries. In New Zealand and Uruguay, the merino proportion is
small, larger in Argentina, and larger still in South Africa and Australia.
Figure 1 shows sheep flock numbers for the major southern
hemisphere wool exporters from the mid-19th century through to 2023
and 2024. Australian data runs from 1860 onwards. From the early 20th
century the Australian flock has been the largest of this group of countries,
with Argentina second until the mid-20th century after which New
Zealand took over second place. South Africa was either third or fourth in
size, with the Uruguay flock tending (not always) to be the smallest. In the 1870s-1880s,
the Argentine flock was on par with the Australian flock.
Australian sheep numbers have been volatile, with large
falls associated with the Federation drought, the 1914 drought and the early
1940s droughts. Sheep numbers in Australia peaked in the late 1960s and the
late 1980s (actually 1990), before falling through to 2008-2010 and then
stabilising. What the flock numbers do not show is the decrease in merino
proportion of the flock from the early 1990s (nor the increase in merino
proportion during the 1980s).
What about the other wool exporters? The peak size for Argentine
flock size was in the late 19th century. As the 20th
century progressed sheep in Argentina were pushed to the more marginal
agricultural land, with numbers shrinking as this occurred.
New Zealand’s (an incidental merino producer) sheep numbers
peaked in the mid-1980s, after which changes in farm policies and then
competition from other enterprises such as dairy, drove a downward trend in
numbers.
South African sheep numbers peaked in the 1930s, while in
Uruguay numbers peaked in the late 1980s in line with the second Australian
peak, with the swing in demand to finer merino wool from the 1990s onwards not
favouring the Corriedale sheep which were popular in Uruguay.
Figure 2 shows the flock numbers for the countries shown in
Figure 1, expressed as a ratio of their peak level. For example, the Argentine
flock peaked in 1895, so this is the reference point for the Argentine series,
where the flock is now approximately 0.15 of the peak level.
In South America flocks in Argentina and Uruguay are
currently around 0.15 and 0.22 of their peak levels, while in Australia the
flock is projected to be around 0.41 of its peak, South Africa 0.38 and New
Zealand 0.36.
While local factors have influenced the timing of peak flock
levels, evidenced by the wide range, flock sizes have been under downward
pressure since the late 1960s/late 1980s. The trend has been a common one
amongst these southern hemisphere countries.
What does it mean?
The sheep industry currently has two sides with the meat side currently triumphant (to a great extent luckily underpinned by lower international supply) and the wool side is depressed as it continues to pour its limited resources into marketing. The opportunity cost of focusing on marketing is that on-farm productivity is neglected. The trends evident in this article show that sheep are not competing successfully for farm resources across the southern hemisphere “sheep” countries. Change is required or these trends will continue.
Have any questions or comments?
Key Points
- While world sheep numbers have increased in recent decades, flocks in the major southern hemisphere sheep countries have shrunk markedly regardless of whether they are wool or meat-focused.
- The question is why sheep cannot compete successfully for farm resources in these countries?
Click on figure to expand
Click on figure to expand
Data sources: EMB, BAE, AWC, ABARES, Stats NZ, StatsSA, SUL, datos.gob.ar, The WayBack Machine, IWTO, Mecardo