Dr_Paul_Swan_

The Evolving Producer Landscape
– Challenge and Change
Dr. Paul Swan
General Manager - Research
IWTO Strategic Market Insights Session, Sydney, 6th April 2016
A vibrant and productive industry
‘Vibrant’ means…. Attractive to investment capital
(prospects for long-term return on investment)
+
Recruitment of the young
(rewarding career & family prospects)
A vibrant and productive industry
‘Productive’ means….
The return on investment is
attractive
(relative to rainfall, and other land uses)
… which then means it is attractive to
investment capital, and rewards the young!
Vibrant, productive & wool - requires both …
Clear, preferential demand for our wool and
sheepmeat outputs
+
Tools and attitudes to achieve cost-effective
productivity growth
Our proteins are rare & expensive to produce…
Mass-produced ‘factory’ fibres & meat increasingly dominate supply
(chicken, pork, man-made fibres, cotton …)
Data source: UN (2012), IWTO (2014)
Rising protein demand is transforming our industry
$6
$5
Gross va lue
of
$4
produc tion
for
she e pme a t $3
a nd
wool
$2
(AUD
billions)
$1
$0
Sheepmeat
Wool
Rising protein demand is transforming our industry
$6
180
$5
150
Gross va lue
of
$4
produc tion
for
she e pme a t $3
a nd
wool
$2
(AUD
billions)
120
Se a son
ope ning
90 she e p
numbe r
60 (millions)
$1
30
$0
0
Wool
Sheepmeat
Sheep numbers
AUD production value per head has doubled in 14 years
$80
$70
Sheepmeat
Wool
Combined
+5.3% pa
$60
Gross
production
va lue per
sea son
-opening
sheep
number
(AUD)
$50
$40
Stockpile
era
Meat +6.1% pa
$30
$20
Wool +4.5% pa
$10
19
91
19 /92
92
19 /93
93
19 /94
94
19 /95
95
19 /96
96
19 /97
97
19 /98
98
19 /99
99
20 /00
00
20 /01
01
20 /02
02
20 /03
03
20 /04
04
20 /05
05
20 /06
06
20 /07
07
20 /08
08
20 /09
09
20 /10
10
20 /11
11
20 /12
12
20 /13
1
20 3/1
14 4
/1
5f
$0
Can we continue the trends?
In USD terms, production value per head has tripled
$90
$80
Sheepmeat
Wool
$70
Gross
production
value per
season
-opening
sheep
number
(USD)
$60
$50
$40
Stockpile
era
Combined
+8.8% pa
Meat +9.2% pa
$30
$20
$10
$0
Can we continue the trends?
Wool +8.3% pa
Ewe numbers will remain low
Meat industry
forecast to 2030
If adult ewe numbers
are to remain low …
… our ability to grow
industry wealth means
growing productivity
per ewe.
Her lifetime:
• number of lambs
reared
• fleece value,
especially fleece
weight
New challenges, practical skill, practice change
1. Weigh, scan, and body condition score!
2. Run adult ewes in fertility-based mobs (not age)
3. Lamb in small mobs (the smaller the better)
4. Wet/dry assessment at lamb marking. Ear tag
ewes who were dry or have lost lambs
5. Don’t cast for age alone (e.g. 5.5 y/o)
6. Maintain balance of meat and wool, in the
context of lifetime performance
AWI & Practice change
45% of AWI investment in
R&D is in ‘Extension’
This is because R&D
investment which does
not need lead to
change is wasted
Sheep handling Forum – Campbell Town, TAS
Our critical challenge is to
reach out to, and connect
with, the next generation of
wool investors
2014 Breeding Leadership Course, Clare
2 examples
National Merino Challenge is a
2-day, national competition years 11, 12 and tertiary
students, Australia-wide
Lifetime Ewe Management –
2,200 AWI-funded graduates
nationwide
Our ageing farmer population
43
Sources: ABS 4102.0 Australian Social Trends, December 2012
Australian Farm Institute, “Farmers are getting older, but its not a problem’, October 2013
63
Some implications
1. Livestock farmers
average 20 years older
than the overall
workforce (63 vs 43
years of age)
2. They work an average
49 hours of work per
week
3. On average, they manage $3.3m of business assets
4. Over the coming decade, retirements will lead to…
•
Around $400 billion in asset transfers required
•
Recruitment challenges
Farming easier is becoming our greatest challenge
500.000
Labour is a
constraint to
profit
Labour saving
devices are
becoming
critical
Automation of
operation is a
opportunity
Potential
400.000
Whole 300.000
Farm
Profit
($/year) 200.000
100.000
0
6
7
8
9
10
Hours worked per day
Source: Young, J. and Thompson, A.N. (2013), “Scoping the benefits of saving labour in sheep enterprises in Australia”, MLA Report B.LSM.0022
11
Farm automation innovation
Smart ear tags:
• maternal pedigree
(mothering up)
• behaviours (onset of
lambing)
• localisation within paddock
(theft, dog alerts, grazing)
Farm trials start later this month
A major challenge, but
also opportunity
Vibrant, Productive & Wool
We have the foundations built for some wonderful
decades, but have much to do together
Managing the demographics within our flocks is critical
Especially our young growers, and our young ewes