The federal government's plan to phase out the live export of sheep from Western Australia by May 2028 has been described by farmers and industry groups as a "punch in the guts" that could bring WA's Merino industry to its knees, as Hunter farmers warily consider the knock-on effects such a ban could have for the eastern states.
While NSW does not have a direct live export link from eastern ports, and sheep farming accounts for a relatively minor segment of the Hunter's agricultural production (valued at around $21 million of the Upper Hunter's total $462 million produced in 2013, according to Department of Primary Industry data), the Western Australia market has historically proven a restocking reserve for the eastern states to recover from hard times.
Veteran Western Australia shearing contractor Mike Henderson told the Newcastle Herald at the weekend that the federal government's imminent ban of live sheep export from his state could see a percentage of farmers there leave the industry as market confidence falls, leading to an eventual knock-on impact for eastern states that won't be felt until the next drought - by which time, it could prove devastating.
"The drought that ran from 2017 to 2020 had a devastating effect on the sheep industry in the east, and certainly in NSW, but farmers were able to restock quickly by buying surplus animals from Western Australia," Mr Henderson said. "And that's been going on in varying degrees since then - at the moment there are between 100- and 200,000 sheep a month going east."
Mr Henderson said the Western primary industries had been in drought for some 17 months, which has added considerable pressure on farmers, now compounded by the ban that could see a significant proportion of the market phase out over the next four years.
"If a percentage of our growers in WA choose to get out of Merino sheep, it will be a race to the bottom to sell them," he said.
That market pressure has farmers on the home side of the Nullarbor concerned that a potential glut of supply could put downward pressure on sale yard prices in the Hunter in the short term and in the long term, potentially cripple a reserve market of animals to restock from the next drought.
Hilton Barrett, another shearing contractor with around 6500 acres of land and feedlot at Dubbo, who provides shearers in the Hunter, said he was buying sheep out of WA and freighting them across country because the per-head prices on the other side of the Red Centre were almost below the cost of producing the animal.
"$70 for a Merino in their prime, scanned in-lamb to a cross-breed like a White Suffolk, is just cheap as chips," he said. "So, we'll take those, and next minute we will have a surplus of sheep over here. But when that cycle turns, and we're in drought, we aren't going to have anywhere to go to buy those sheep."
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Mr Henderson said that WA's live export market largely dealt in Merino wethers that the state didn't have the facility to slaughter locally. Selling sheep overseas helped manage the surplus of stock as farmers continued through their breeding cycle.
"The issue is those Merino wether lambs that we will not be able to move. WA is in one of the driest periods that I can recall in the last 30 years. We have a lot of vegetation dying, and the sheep situation in general - not just the boats - is that we have a lot of people with stock on the farm that they have had for some time, that shouldn't be there; the way the system works, they should have been gone.
"The farming system has been designed around getting rid of these Merino wether lambs and to keep breeding the Merino sheep. Now that there's a definite date being set (to stop live export), people will make plans around that. I'm not saying they're all get out, but I think there's going to be quite a few that will get out."
Federal Agriculture Minister Murray Watt said the legislation banning the live export of sheep will be enacted in this term of parliament, delivering one of Labor's election commitments. In announcing the government's intention in Perth on Saturday, Senator Watt also confirmed a $107 million transition package, saying it would give certainty to a "declining" industry.
"There are a number of other states in Australia that used to do live exports of sheep. They got out of it, they moved into more onshore processing," Senator Watt said.
But farmers and industry groups have been left furious on both sides of the Nullarbor variously describing the ban as a "punch in the guts", and the support package as "pitiful".
"Live sheep exports by sea are a key component of our national sheep industry, and so the consequences of its demolition cannot be understated," NSW Farmers President Xavier Martin said in a statement denouncing the government's move.
"This industry is a fundamental market tool that enables farmers to manage livestock and uphold high standards of animal welfare through trying seasons, market failure and more - and so without it, many farmers will have some major problems on their hands."
Mehreen Faruqi, the Greens deputy leader and spokesperson for animal welfare, however, celebrated the move as a win for whistleblowers over an "inherently cruel and morally bankrupt live sheep export trade".
"The Greens first introduced a bill to ban live export back in 2011 and my bill to ban live sheep export passed the Senate in 2018," she said. "Today marks a pivotal moment in our fight for animal welfare."
"The live export trade cannot be made safe for any animal. It is a business model built on cruelty and is simply incompatible with animal welfare."
Beef and dairy markets dwarf the Hunter's relatively smaller sheep production, but DPI data from June 2013 estimated just shy of 400 workers were employed by sheep and wool farming in the region. While farmers who spoke with the Herald on Saturday noted that the local export market was somewhat buffered by sales to interregional abattoirs where meat was then processed, packaged and on-sold for export, their concern was that the imminent ban in WA would have a secondary impact here as the market responded.
Total NSW sheep meat export volume rose by 15 per cent year-on-year to a record high of 146,783 tonnes in 2022-23, 16 per cent above the five-year average, according to DPI data.
Despite the record volume, the value of NSW sheep meat exports declined slightly, down 2 per cent to $1.24 billion, just below the record high of 2021-22 and reflecting a 15 per cent fall in the average unit value of sheep meat exports.
The government's plan to phase out the multi million-dollar WA live export trade over the next four years was one of 28 recommendations in a report made by an independent panel, which was delivered to the government last October, and released on Saturday.
More than half of the transition package money will be used to assist sheep producers and the supply chain, particularly in Western Australia, in building on existing and emerging opportunities.
Some money will also be spent on a transition advocate to help with communication between industry and the government on the phase-out.
"This is a comprehensive package that will assist to strengthen supply chains, develop market opportunities and improve animal welfare," Senator Watt said.
The vast majority of live sheep exports are from Western Australia. Labor pledged at the 2019 and 2022 federal elections to end the live sheep export trade.
The commitment was made to abandon the trade after 2400 sheep died of heat stress in 2017 while travelling on a ship from Australia to the Middle East. The industry has repeatedly maintained animal welfare concerns have been addressed.
Earlier in 2024, a live-export ship, the MV Bahijah, was ordered to abandon its voyage in January due to Houthi rebel attacks in the Red Sea.
About 14,000 sheep and 1000 cattle spent more than five weeks on board the vessel before being forced back to Perth. The animals were later cleared for re-export to the Middle East.
The live sheep export industry has been contracting for many years. Government figures show its worth has declined from $415 million in 2002-03 to $77 million in 2022-23. The industry has put the value of the live sheep export trade at an estimated $143 million a year.
This story was compiled with reporting from AAP.
