Robert Herrmann

AUSTRALIA’S grower-funded wool industry bodies need to review their roles and functions to ensure they were fit for purpose, according to analyst and executive Robert Herrmann.

At the annual Doug Bicket Memorial Ewe Competition event near Parkes in New South Wales last Friday, Mr Herrmann said the industry has similar structures in place today as when the wool clip was three times its current size.

“This is unacceptable; producers, brokers, exporters and processors have all adjusted to the reduced volume of the clip, industry bodies must also,” he said.

As part of his formula to revitalise wool production, the former shearer and wool classer, now Mecardo analyst and executive director of the National Council of Wool-Selling Brokers of Australia, said the industry bodies needed to demonstrate they have reviewed their structures and activities to ensure they remain fit for purpose.

“The number of wool industry bodies has grown over a long time, the current decline in sheep, and profitability of producers dictates that these services must consider ways to rationalise and cut their cloth to fit the times.”

Mr Herrmann said because brokers, processors and exporters operate on commercial terms they were constantly evolving.

“We have to function and operate in the commercial world.

“Industry bodies that rely on funding which ultimately originates from growers need to consider their structures and the way they operate in these times when we have a clip one third of what it was.”

Mr Herrmann said the ability to produce wool and meat sustainably makes Merinos a “fit for purpose” enterprise in 2025.

Mr Herrmann said in 2023 Meat & Livestock Australia analyst Tim Jackson made the point that wool was valued at 4.5 times higher than the slaughter price for Merino lambs, but in the latest edition of the MLA newsletter Emily Tan reports that wool is now valued at only two times greater, and that this and other factors and “leading to a potential preference for sheep meat as opposed to wool.”

Australian Merino wool is part of a global fibre market valued at US$590 billion that grows by 3.7 percent annually. Wool’s share sits at about 1.2pc of the total apparel fibre market and about 8pc by value.

“Wool accounts for around 3.7pc of total farm gate production, and 5.3pc of the value of exports.

“So by any measure wool is no longer a big player either at farmgate level or on the global apparel fibre stage.

“Yet we know that society has never been more attuned to the concept of using natural products, sustainability is bandied around everywhere, renewable and recycling beliefs abound,” he said.

“All concepts that wool easily meets.”

Mr Herrmann said in 1990 Australia had about 170 million and all through the 1990s at least 90pc of wool sold was classified as Merino.

“Today, we have less than 80 million sheep, and since 2007 the percentage of Merino wool produced from the flock has been less than 80pc, currently it sits below 70pc.

“As an industry, we must confront the fact that despite the wonderful wool we produce, regardless of the global demand for natural and sustainable fibre, and not-with-standing the economic and sustainability of a self-replacing Merino flock, since 1990 Merino sheep have well and truly lost the fight for acres.”

“Whether we like it or not, wool is in the fight for acres, with cropping one of our major adversaries.”

Mr Herrmann said the future positioning of Australian commodities on the global stage will require promotional funding, and secondly, while Merino wool can benefit from its niche product status, markets need sufficient and reliable supply otherwise substitutes take over.

“The long-term decline in wool production impacts directly on funding for R & D and marketing.

“Not only are there less levies collected from growers, the matching funds from government also decline,” he said.

“If at the same time competing industries are growing, they will attract the attention and funding of corporates & government.

“Wool needs to claw back some acres, at least to demonstrate to the future generations of producers that it is not in terminal decline,” Mr Herrmann said.

“We need others – overseas customers, to invest in the future of wool.

“This will not happen if wool is seen as a declining commodity, if; however, it is seen as a growing industry, downstream investors will come.”

Mr Herrmann said clearly, to fund the future investment of R & D the wool clip also needs to grow in value, to maintain in real dollars the investment in R & D as well as provide for its marketing budget.

Constant improvement needed

Mr Herrmann said in the future the wool industry will need to demonstrate continuous improvement, beyond the ‘banked’ gains that 200 years of breeding, and science-based performance recording and benchmarking, sire evaluation projects and ewe competitions have contributed.

“We will need to continue to research and develop the next advancements and extend them to the rank and file producers for uptake.

“The challenge to get sheep shorn in the future is a logical R&D project that requires immediate and sustained focus.”

He said the industry also needs a cohesive story with “everyone singing of the same hymn sheet to espouse the value of the Merino.”

“We now have a more collegiate approach to breeding, where those with differing approaches seem to be less dogmatic than in the past, more likely to take some of the “other” sides ideas and include them in theirs.

“This is a sensible, and a necessary approach, the next generation want an industry that is open to new ideas and that can work together,” he said.

Industry needs to ‘tell the story’

And finally, Mr Herrmann said the wool industry needs to “tell the story.”

“We need to tell it in a way that is compelling, become “raving fans”, be prepared to argue strongly for the industry we all love, with the objective to build the supporter base and number of broad acre farmers producing Merino wool.”

Mr Herrmann said it is a cop-out to say cropping has an easier run than wool and it has been used in the Merino industry for too long.

“We need to focus on measurable improvements, and then disseminate the improvements across the industry, have a sound story and then prosecute it widely.”

Mr Herrmann said since 1990 wool has lost a lot of acres that previously were set aside for Merino sheep, “but we now have a Merino sheep that is perfect for the times.”

“It produces wool and meat sustainably and is meeting the requirements of a growing global population.

“The Merino sheep is now at its most advanced stage and providing exciting opportunities to producers,” he said.

“We need more people to understand this great industry.

“We need customers to appreciate all that the Australian wool producer does to present the world with most of its apparel quality fine wool, and broadacre farmers to appreciate that Merino sheep are a legitimate and viable consideration for much of the Australian rural landscape,” Mr Herrmann said.

“If we continue to improve the Merino and our industry, if we present a cohesive story and we actively promote the industry then we will be the generation that ‘Made Merino Great Again’.”