Time short to transition flocks

The federal government has earmarked May 1 2028 as the date Australia’s trade in live sheep will end.

For many producers, however, transitioning their flocks will take five years or more.

For example, integrating new genetics into a flock through a new ram source takes about seven years for 60 per cent of the flock to inherit these genes.

Setting up trials to validate concepts and gather evidence takes two years, plus an additional three to account for seasonal variations (five years would be better). An extra two years for extension programs and seven for genetic enhancements indicates a possible need for a 14-year phase-out process.

Industry consultations by Episode 3 on expanding lamb feedlots, developing processor capacity, and enhancing logistics could span three to six years, assuming no major delays occur.

Moreover, developing and broadening offshore markets for boxed sheep meat might require five to 10 years to become fully established.

Transitioning from live sheep trade necessitates significant adjustments within the supply chain, such as ensuring a steady supply of sheep and lambs that meet processor specifications before expanding processing capacity or accommodating more workers in regional towns.

EP3 proposed several immediate actions in a report to the independent panel appointed to consult with industry and advise the government.

The proposed actions start from the estimated zero year in 2025 and include funding for change consultancy, farm enterprise change trials, lamb feedlot trials, redevelopment of sheep meat airfreight capacity focused on the Middle East and North African (MENA) region and introducing a west-to-east freight equalisation scheme intermittently.

Change consultancy services would support enterprise change trials, assist with lamb feedlot trials, provide financial counselling, recruitment expertise, and mental health support as necessary.

Farm enterprise change trials would run for several years to factor in seasonal changes, requiring formal approvals from an animal ethics committee. Lamb feedlot trials would target producers new to feedlot design, animal welfare, and management practices, aiming to demonstrate the viability of intensive lamb finishing systems for Western Australian sheep producers and help manage risks due to shorter growing seasons.

Enhancing sheep meat airfreight capacity involves increasing air traffic, especially from the MENA region, to improve market access for Middle Eastern light lamb carcasses.

A subsidy program could support cargo-only flights, akin to the International Freight Assistance Mechanism used during COVID trade disruptions.

An intermittent freight equalisation scheme would subsidise transfers of sheep and lamb from WA to the east during transition phases when price disparities are notably high.

Secondary elements, covering years two to eight, include transition packages for affected workers, increased abattoir labour and plant capacity, commercial lamb feedlot expansion, and further development of MENA market access for boxed sheep meat.

Labour access remains a primary challenge for WA processors aiming to increase throughput. Existing labour visa schemes are not entirely suitable, and regional accommodation for these workers is limited. Enhancing domestic labour or addressing gaps in training and development for meat workers are potential solutions.

Plant infrastructure enhancements, hindered by regulatory challenges and power access issues, represent medium- to long-term obstacles to expansion. However, financial and non-financial assistance could accelerate commercial lamb feedlot expansion and alleviate some immediate pressures.

The transition concludes with the completion of farm enterprise changes in WA, the expansion of sheep meat market access to regions such as China, the US, South-East Asia, and the development of a new market in India.

This aligns with adjustments in flock composition similar to those in eastern states, ensuring WA sheep and lamb meet export specifications for these key destinations.

Funding for ongoing market development, including consumer preference surveys, business development programs, trade fairs, and market access expansion, will ensure domestically processed products from increased feedlot and abattoir capacity find appropriate offshore markets at competitive prices.

Australia’s free trade agreement with India, providing preferential tariffs for sheep meat exports, presents an opportunity to develop market presence. However, developing this market will take considerable time, exceeding the current May 2028 deadline due to India’s low current consumption levels, modest GDP per capita, and a self-sufficient sheep flock.

• Matt Dalgleish is co-founder and director of Episode 3 (EP3)