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Australia is facing a sheep crisis, as farmers have more woolly animals than they can handle and are forced to either kill them or give them away for free, CNBC reported.
The country's mutton market has collapsed, as prices have plunged 70% in a year to just $1.23 per kg, according to data from Meat and Livestock Australia (MLA).
The reason behind the sheep surplus is the unusually wet weather that Australia has experienced in the past three years, which has boosted grass growth and sheep reproduction in regions like New South Wales and Victoria.
MLA's global supply analyst, Tim Jackson, said that the sheep flock had reached 78.75 million head, the largest since 2007, due to the favorable seasons.
As the rain kept pouring and the mutton prices remained high, farmers were tempted to keep more sheep on their farms instead of sending them to slaughterhouses and markets, according to the chairman of Sheep Producers Australia, Andrew Spencer.
However, the situation changed drastically in 2023, as the weather turned dry and hot, reducing the feed supply and the farmers' confidence. Jackson said that the dry conditions had increased the supply of sheep and lambs to processors, who were already struggling with labor shortages and a backlog of unprocessed stock.
Steve McGuire, vice president of the agricultural advocacy group WAFarmers, said that many farmers were facing a loss of profitability and had no market for their sheep. He noted that some farmers had resorted to destroying their animals, while others had tried to give them away for free, but there were few takers.
He also said that Australia had exported a record amount of sheep meat in October, indicating that the meat was starting to move, but there was still a big backlog to clear. He expected that the mutton prices would continue to fall for consumers in Australia and overseas.
However, he added that some farmers were considering not mating their ewes to reduce costs, which could lead to a fall in young sheep numbers and a possible shift from oversupply to undersupply in the sheep market.
The sheep crisis has also affected the morale of the farmers, as a recent National Farmers Federation survey showed that more than 60% of Australian farmers surveyed did not feel more positive about the future of farming compared to a year ago.
Sheep farming is a significant industry in Australia, providing employment, income, and export revenue for many rural communities. According to MLA, the industry was worth around $2.2 billion in 2019. Sheep farmers produce high-quality wool and meat, which are in demand in many global markets. Australia is the world's largest sheep exporter and exports 57% of its lamb and 92% of its mutton production, respectively.
Sheep farming contributes to the country's environmental sustainability, as sheep graze on natural pastures and help reduce soil erosion and greenhouse gas emissions. However, the industry also faces some challenges, such as sudden dry weather, labor shortages, low prices, and competition from other countries.
Some farmers have diversified their production by adding crops, cattle, or goats to their farms. In contrast, others have invested in technology, such as drones, sensors, or genetic testing, to improve their efficiency and productivity. Some farmers have also formed cooperatives or alliances to share resources and access new markets. These strategies have helped some farmers cope with the sheep glut and prepare for the future.