The 5 things driving our breeding and business direction over the next decade

The seedstock business requires you to continually look forward to what the sheep industry looks like in a decade. Breeding direction takes 5-10 years to make substantial change so what we do now, impacts what our sheep look like in 2035.

Never has breeding direction been so important for a commercial sheep flock. Lamb has got some challenges, but at Lambpro we have never seen the future so bright.

Key issues driving breeding direction

1. Sheep need to address workload

  • We need to change the labour requirement of sheep.
  • The average sheep producer is 62-65 years of age, and rapidly rising.
  • Less graduates from school and university are choosing the sheep industry and ABARE is predicting less and less labour supply into agriculture.
  • The days of continual drenching, dagging, crutching, flies and footrot need to continue a trajectory downwards towards nearly zero.
  • Less labour availability will drive up cost of production, and labour efficiency will become central to sheep industry growth.
  • A long term move to sheep that shed their wool, have worm resilience and resistance, and are footrot hardy is central to the Lambpro breeding direction.

2. Productivity gains need to accelerate

  • Costs continue to rise in all agricultural enterprises and the sheep industry’s future success will hinge on gains in production without added cost.
  • Technology adoption, management change and genetics will be central to maintaining gains.
  • Genetics will contribute to almost half of these gains, and the seedstock industry will need a significant increase in investment to maintain these gains.
  • The seedstock industry will need more scale, and a greater partnership with researchers, farm economists and markets to maintain on farm gains.

3. Specialised finishing will be more widely adopted

  • The Australian beef industry uses feedlotting to smooth supply, control product consistency and improve product quality.
  • Finishing over the past decade has been a financially speculative exercise for lamb finishers.
  • The two things that will change will be the use of finishing to secure supply for processors/brands, but importantly to add carcase value. We estimate over 5% IMF the value of a carcase improves 50 cents a kg for every 1% of IMF or $12-17 a lamb.
  • This added value can change the economic fortunes of lamb finishing.

4. We can’t box ourselves into a single market or production system

  • Beef has learnt many lessons from the Wagyu model about the dangers of lower production, high-cost systems over time.
  • Seasons change, feed cost change and markets change creating risk and volatility. The ability to be agile is key and genetics need to be versatile for markets and finishing systems.
  • We need genetics that can be turned off grass into a highly muscled 23kg domestic lamb, or the same lamb can be fed grain for 70 days and produce a 32-34kg dressed 7% IMF (marbling) product.
  • Our genetics have always been ideal domestic lambs, however the past decade we have ensured they can deliver high levels of IMF at heavier weights.
  • All our breeding programs are aiming for market and finishing system versatility.

5. Lamb needs to reposition itself to the premium market

  • Lamb is an expensive protein for a consumer.
  • More and more lamb is positioned as a premium protein in upper echelon demographics and food service globally.
  • Lamb however is still an inconsistent product from a quality and price standpoint when compared to beef, chicken and pork. This is a major impediment to growth globally.
  • Most lamb dishes sit on menus next to pork and chicken in what I term the ‘cheap seats’. Lamb however is significantly more expensive with little provenance and is suffering a food service decline particularly domestically.
  • Highly marbled beef is saturating the world’s markets, where lamb has a multi-billion dollar opportunity without the global competition that beef experiences.
  • Australian lamb has the ability to produce a consistent 7%+ product, almost double the current national average, and 3-4 times the marbling level of most competing lamb products.