Australian Sheep Herd Rebuilding Seen

CANBERRA - Mar 2/05 - SNS -- Favorable prices will support rebuilding of the Australian sheep herd, Richard Perry, Research Economist with ABARE (Australian Bureau of Agricultural and Resource Economics), told the Outlook 2005 conference here.

A positive outlook is expected for lamb exports, which are forecast to increase due to growing demand for sheep meat in key export markets — particularly the United States.

"However, likely continued low returns from wool are expected to drive the Australian sheep industry toward greater emphasis on meat production", Perry said.

"The outlook for wool continues to be weak, with the eastern market indicator forecast to average 740c/kg in 2005-06 mainly owing to reduced demand for wool," added Perry. Competition from synthetic fibers combined with an assumed modest income growth in OECD markets are the reasons behind falling wool demand over the medium term.

Trevor Flugge, Chairman of the Woolmark Company outlined his dream for an industry that is "demand driven, supports investment in capital and labor, provides a growth path for profitability and personal satisfaction for those involved."

Flugge said, given the current situation "tough decisions are required on rationalization within the industry to ensure its future viability," adding that, "the industry needs to improve communication and marketing to promote the positive attributes of wool to consumers."

Robert Wallace, Principal of Quality Consultants, told delegates that "creating a label for wool by focusing on the credibility and integrity of the raw material can create new demand. Retailers can recognize and promote the benefits of the labeled product as consumers are interested in brands and what they represent, not the fibre content.’

Brent Finlay, a wool grower from southern Queensland, conveyed strategies for resource management in the wool industry. He said, "forming a group and undertaking detailed property plans for individual land holders and across the region can make resource management achievable."