Are We Building or Borrowing from the Future?
Much of the analysis surrounding the Western Australian sheep industry has traditionally centred on one question: How many breeding ewes do we have? It’s an important question, but perhaps not the most useful one when trying to understand where the market is heading.
The reason is simple. Markets don’t trade estimates. They trade supply.
Rather than relying solely on estimated flock numbers, I’ve been looking at something we can actually measure. Each year, sheep and lambs leave the WA production system through four identifiable pathways: lamb processing, sheep processing, live export and interstate transfers. Together, these figures provide a clear indication of the level of demand being placed on our flock.
When viewed over the past decade, those trends tell an interesting story.
One of the more striking observations from my analysis is the apparent divergence between the breeding flock and lamb production. The trends I have reviewed indicate that the Western Australian breeding ewe flock appears to have declined by around one-third over the past decade, yet lamb processing has remained relatively stable.
The more significant question is how lamb processing has remained comparatively stable while the breeding ewe base appears to have been contracting. One plausible explanation is that insufficient replacement ewe lambs have been retained within the production system, allowing current processing levels to be maintained at the expense of future breeding capacity. If that interpretation is correct, the industry has effectively been drawing on tomorrow’s breeding flock to satisfy today’s demand.
That approach can sustain production for a period, but it also reduces the number of breeding females available to generate future lamb crops. Over time, the consequence is an increasing disconnect between current market demand and the industry’s capacity to supply it.
This isn’t about predicting an exact flock size or forecasting precisely how many lambs will be available in 2027. Seasonal conditions, producer confidence and market signals will continue to influence those outcomes. However, the underlying trends are becoming increasingly difficult to ignore. If current demand patterns persist, maintaining today’s level of sheep and lamb production is likely to become progressively more challenging.
The purpose of this analysis isn’t to suggest that the future is predetermined. Rather, it’s to encourage a broader discussion about where the industry is heading and, more importantly, what we can do to influence that outcome.
Over the past two to three years, much of the industry’s attention has understandably been focused on the legislated phase-out of live sheep exports. That issue has had profound implications for producers, exporters, regional communities and the broader WA sheep industry. However, while much of the discussion has centred on the loss of a marketing pathway, it may also have diverted attention from another equally important question: what has been happening to the underlying productive capacity of the WA sheep flock?
The trends suggest the longer-term challenge extends well beyond live exports. Ultimately, the future of the industry will be determined not only by where sheep can be marketed, but by whether Western Australia retains the breeding flock required to produce them in the first place.
The challenge now extends well beyond next season’s lamb crop. If the underlying trends are accurate, the industry faces a broader strategic question: how do we create the confidence for producers to invest in rebuilding the breeding flock while continuing to meet the commercial demands of today’s market?
That will require more than higher prices alone. If producers are to retain more breeding ewes and rebuild flock numbers, sheep need to compete economically alongside other enterprises, particularly broadacre cropping. Producers need confidence that sheep can deliver reliable long-term profitability rather than being subject to the boom-and-bust cycles that have historically characterised the industry.
Creating that confidence will require greater certainty around future returns, improved risk management tools and stronger alignment between producers, processors, agents and the wider supply chain. Forward supply agreements, minimum price guarantees and other marketing innovations are not a solution in isolation, but they can help provide the confidence needed for producers to make longer-term breeding and investment decisions. If the industry is serious about rebuilding its productive capacity, making sheep a more profitable and predictable enterprise must become a central part of that strategy.
No single business or organisation will solve this challenge on its own. It will require producers, processors, agents and industry bodies working together with a shared objective. If AGORA Livestock can contribute by improving market transparency, expanding market access and developing practical risk management tools, then we’re committed to playing our part.
Perhaps the real question isn’t what the 2027 lamb crop will look like.
It’s whether we’re building the breeding flock needed to support the years beyond it, or simply borrowing from the future to satisfy today’s demand.