The potential phase-out of Australia’s live sheep export market has raised big questions for Merino producers, especially those who have relied on wethers sold into the trade. Our analysis used the Australian Farm Optimisation Model (AFO) to understand the on-farm impacts of losing this market and to identify the most profitable alternatives.
Why Live Export Matters
For many producers, live export has been a simple and reliable market:
- It has offered 25–30% higher prices for light wethers compared with mutton.
- It has provided a “safe haven” in poor years, allowing sheep to be offloaded even when domestic conditions are tough.
- It has suited wool-focused or crop-focused farms that don’t run high-production lamb enterprises.
Without this outlet, farmers will need to adjust flock structures and management to remain profitable.
How We Analysed It
Using the AFO whole-farm model, we tested a Merino flock in the Kojonup/Darkan region, lambing in July and selling wethers into various alternative markets. AFO accounts for the whole-farm feed budget — balancing energy supply and demand across different flock structures, weather-years, and nutrition targets. By capturing all these factors simultaneously, the model can accurately optimise flock structure and feeding strategies for the most profitable market options.
Key Findings
1. Profit Depends on Hitting Liveweight Targets
- Meeting sale weight and fat score targets is critical, especially for heavy lamb systems.
- If targets are met, shifting from live export into prime lamb markets can be profitable.
- If targets are missed, mutton or light lamb markets remain viable fallbacks with only modest profit impacts.
2. Alternatives to Live Export
- Prime lamb production remains the most profitable option, but it requires higher inputs and more management.
- Store markets are good safety nets, especially if liveweight targets aren’t achieved.
- Retain for sale as older mutton is less profitable, as mature wethers gain little extra value while taking up space that could run more ewes.
3. Terminal Sires Can Boost Returns
Running a self-replacing Merino flock mating surplus ewes to terminal sires increased profit by ~6% compared with a pure Merino system, thanks to higher weaning rates and faster-growing crossbred lambs.
4. Robustness to Price and Stocking Changes
- Profits for different flock structures held up under ±25% changes in meat and wool prices, meaning the results are stable across a range of market conditions.
- Reducing stocking rates cut supplementary feed use, but didn’t change which flock structures were most profitable.
What It Means for Farmers
If live export ends, profitable pathways remain available — but they come with trade-offs:
- Skill and management: Prime lamb systems require greater attention to feeding and condition management.
- Market risk: More farmers shifting into lamb could pressure domestic prices.
- Resilience: Without live export as a “safety valve,” farms may face greater risk in poor seasons. Requiring an improved management plan with several fallbacks in place.
The Bottom Line
Ending live export would be disruptive, but not the end of profitability for Merino enterprises.