WA government live sheep export submission underestimates flock reduction and job losses

That is what the State government has said in its submission to the independent panel consulting on the phase-out of live exports by sea.

The Federal government formed the independent panel after it announced earlier this year of its intentions to end the live sheep trade if it wins the next term of government.

WA Agriculture and Food Minister Jackie Jarvis said a minimum of five years was the preference.

The State submission, which was released on the weekend, said the timeframe to phase-out the industry needed to be long enough to allow each sector of the supply chain to plan and implement the strategies required without live export.

"In the absence of increased support to the processing capacity and development of export markets for meat and wool, the size of WA sheep flock may drastically reduce as farmers switch from mixed-enterprise systems to solely broadacre cropping," the State government submission went on to say.

"This will also have a devastating impact on the broader WA Merino wool industry.

"On modelling of only a 15 per cent drop in the size of the WA sheep flock as a result of the ending of live exports, the cost to the agricultural industry without a reallocation of land assets to cereal cropping would be in the order of $123 million annually.

"A decline in WA sheep numbers of 15pc would take our State flock to 10.5 million head of sheep."

The government submission estimates the phase-out would see a reduction of 690 full-time equivalent employees (FTEs).

It said the value chain includes several firms and business entities that are likely to be impacted by the phase-out of live sheep export trade, including suppliers of inputs to farms and processors, the shearing industry, stock transport, stock agents and processors.

This notably does not include live exporters (office staff, vets, on-board stockmen, feedlot operators, feedlot staff, in market/international employees) or wool buyers/exporters, indicating the figure would be much higher.

The WA Government submission notes that support should be considered for expansion of the processing sector, the development of export markets for sheep meat, and research and development activities to ensure that WA farming systems remain diversified and sustainable.

It said a transition package should also consider support for businesses along the supply chain and the regional communities affected.

Corrigin producer and The Livestock Collective spokesperson, Steven Bolt, said he had only had a brief read of the submission and thought the 15pc reduction in sheep numbers used as the baseline was too conservative.

"Clearly we are seeing intent from the industry to reduce sheep numbers," Mr Bolt said.

"What we are hearing from producers is talk of not mating ewes and selling down multiple age groups of ewes.

"I can see a cliff face coming for the industry as far as sheep numbers are concerned.

"In two years time we could see a huge fall in numbers, unfortunately all as a result of government interference within our industry."

Mr Bolt said a 25pc reduction was a conservative number in his opinion.

He said a switch to bigger cropping programs was not viable for many producers who utilise their unarable land, like low lying areas, creek lines, rocky country and waterlogged land for their sheep enterprise.

An industry representative queried why the State's submission was sent in so late after the May 31 deadline and suggested it lacked critical detail.

"The situation of oversupply in the WA sheep industry in the absence of live sheep exports is being oversimplified by saying give processors time to gear up by having a long phase-out period," an industry representative said.

"Over supply will get exponentially worse due to the lack of demand for export type sheep, many of which do not meet domestic processors' sheep weight/condition and marketing requirements now or into the future.

"There will be no processor buyers that are willing to pay prices equivalent to those currently realised in the live export markets and these factors together mean that sale options and prices for sheep farmers will be limited.

"The flow-on impact will be a significant reduction in the WA sheep flock and wool harvested."

The industry representative said by the time processors geared up and resolved their current issues, which weren't going to disappear overnight, there would not be enough sheep left for their ongoing viability.

They said winter downturns in kill numbers was problematic and questioned what it would be like in four years time.

The representative said continued discussion around the trade decline should be well understood, but it wasn't.

"The number of sheep exported and hence the total value of the trade has declined in recent years driven by the introduction of the moratorium, increased regulation and associated costs, market factors like international price competitiveness and from 2019 - 2022 there were record high sheep prices and record movements of sheep from WA to the Eastern States to restock post drought," the representative said.

"These factors have caused a decrease in Australia's international competitiveness to supply sheep for export.

"Consequently, there has been a decrease in numbers of live sheep exports."

The industry representative said the modelling that the submission was based on was very conservative.

"A 15pc drop in flock numbers is totally flawed and will be double that as the croppers who run sheep for the benefits it provides their operations will simply cease running sheep overnight," they said.

"Those large numbers of lambs each year that are traded from the eastern wheatbelt to the central and southern areas to be grown out for live sheep export will stop in their tracks as growers divest themselves of their breeders."

The government submission said the phase-out/transition needed to be managed well or the industry will face serious consequences, citing the current oversupply as an example.

"Pricing has dropped significantly, and specifications have increased, so buyers are being more selective with what they are choosing, and growers are having to work harder (and spend more) to sell sheep," the submission said.

"The sensitivity analysis shows that it is a straight-line effect on profits and changing flock structure doesn't and can't solve the problem.

"Modelling indicates the greatest economic impact will be on sheep producers and those businesses directly supporting the sheep supply chain, from both an economic and employment perspective.

"Significant support, resources and a long transition period are required to ensure that the potential risks from the cessation of live export are minimised and that the WA farming systems remain diversified and sustainable."

The independent panel consulting on the phase-out of live sheep exports by sea has contacted individuals and groups inviting them for further meetings to be held at the end of this month, Farm Weekly understands.

This is in the wake of a panel update, saying it completed public consultations on June 27 and offering a full list of submissions approved for public release, the meetings will take place around the time Federal Cabinet is due to be sitting in Perth.