Setbacks have included extreme price volatility, including the price crash of 2023 in which mutton dropped to $1 a head, and policy decisions being made in capital cities far removed from farms.
Extended droughts, in particular in southern regions the past three years, have seen some farmers scaling down flocks despite weather improvements.
More recently a fuel crisis has come out of the blue.
Against this backdrop, a promising future was painted by Sheep Producers Australia chief executive Bonnie Skinner to a 400-plus audience attending the Out The Gate conference by Beef + Lamb NZ in Christchurch.
She said the sheep industry was adapting in real time to be more responsive to market signals, their customer’s needs, technology and data with a willingness to respond to complex, volatile and changing conditions.
Australian farmers were facing challenges familiar to many NZ farmers, she said.
"[This is] an industry which to use an Australian expression has quite literally had the kitchen sink thrown at it, an industry which has faced pressure from pretty much every direction, many of those things . . . out of the hands of producers who are feeling those impacts on the farm. But I think the key thing is we are an industry that bends and doesn’t break."
The 2023 crash shook a lot of producers and caused businesses to exit sheep, she said.
Farmers are operating businesses when consumers, markets and investors were asking for more information about their environmental credentials and contributions to reducing emissions.
"But across the industry that same pressure has driven adaptation. We have emerged out of this situation — and I should say some people are still very much in drought conditions — with much more sophisticated containment feeding arrangements for sheep that are producing strong animal welfare outcomes as well as production outcomes including reproductivity performance."
Farmers had become better with feed budgeting and managing water to emerge stronger against droughts coming at them more frequently than in the past.
The live export phase-out in Western Australia in 2028 was felt across the industry and cased a deep mistrust in the government and the lowest confidence levels on record, she said.
Flock reductions were stabilising on the back of strong commodity prices and seasonal conditions.
"This period of pressure is really forcing producers in Western Australia to have rethink about how they run their operations."
She said many opportunities were set to take the sheep industry in an exciting space.
A smaller flock had resulted in farmers doing better with less as shown by nearly a 20% growth in carcass weights in lamb production over the past 20 years.
Another development was true dual-purpose Merinos with farmers no longer having to make trade-offs between wool and meat quality.
Demonstrating the genetic development was a Merino winner in the LambEx Feedlot Carcass Competition in 2024.
However, wool productivity growth had slowed with any turnaround expected to be based on the use of data, technology, aligned supply chains and adapting to changed market expectations.
Sheep Producers Australia has drawn up the industry’s new Future Flock 10-year strategic plan.
The national flock is forecasted to be about 67 million this year, although estimates put it closer to 62m to 65m.
"The fact we don’t even know our number I think that’s a troubling issue for me in terms of how we approach and plan for our industry. The reality is we have been dealing with difficult seasonal conditions and we’ve had extremely low prices for wool and we have got major lamb competition issues. So cropping in particular is something that is expanding into many of the sheep production areas in Australia."
Ms Skinner said some of the top-performing sheep enterprises, most of them dual-purpose Merino producers, were significantly more profitable than their peers.
Many benchmark farmers were three times more profitable than average producers.
"Those decisions they are making around genetics, precision management and data are compounding year on year. My concern is the structural gap between those producer and the middle of the bell curve is becoming wider and is possibly becoming structural."
That was sharpening the urgency in mapping out the future and making changes, she said.
One of the ways the problem was being addressed was the Sheep Sustainability Framework in its fifth year of collecting data ranging from animal health and welfare to the environment, community and financial resilience.
Trend lines emerging include greenhouse gas emissions for sheepmeat processing and water use going down and a move away from mulesing.
Since electronic identification was made compulsory last year for all lambs, 20 million of their movements were recorded in a national traceability database.
The system was introduced by the industry to make sure a biosecurity system could trace sheep quickly and accurately in the "unthinkable" event of an emergency disease outbreak.
Ms Skinner said this reflected an industry moving in real time and producers could see the value proposition in managing the production output of their flocks.
This was being combined with genomic developments with some producers shortening generational intervals with the technology and lower testing costs had accelerated the use among commercial farmers.
