- The Sheep Turnoff Ratio (STR) has continued to drop during the first quarter of 2021, hitting the lowest it has been on record at 8.9% for the month of March.
- Currently, the average annual STR sits at 9.3% for the 2021 season.
- Analysis of the annual average STR to annual flock change highlights that a flock increase of closer to 7% could be on the cards this year, if the STR stays at these record low levels through out the season.
The Australian Bureau of Statistics (ABS) sheep and lamb quarterly slaughter data released today allows us to get a picture of the status of the flock rebuild and how aggressively producers are looking to increase their respective mob size.
The sheep turnoff ratio (STR) highlights the proportion of sheep slaughtered and sent out of the country as live export as a proportion of the flock and expressed as a rolling 12 month average. Historically when the STR has moved below 14% the flock has experienced rebuild.
During the 2020 season the STR dipped into flock rebuild territory for the first time since the 2016/17 season, registering a level of 10.6% as at December 2020, which was the lowest the STR has been since late 2012. The updated ABS slaughter figures to the end of March 2021 shows that the STR has continued to drop hitting the lowest it has been on record (data back until 1989) moving to a level of 8.9%.
A decrease in the STR to this level signals that sheep producers are keen to rebuild the flock quickly. Analysis of the annual STR to flock change since the early 2000s shows a strong degree of correlation between the STR and flock change.
Meat and Livestock Australia (MLA) forecast an increase of 5.2% to the flock during 2021 in their February 2021 release of the sheep industry projections. Currently, the average annual STR sits at 9.3% for the 2021 season. Analysis of the annual average STR to flock change (using a line of best fit approach) suggests a flock increase of closer to 7% could be on the cards this season, if the STR stays at these record low levels (below 10%) for the entire year.
MLA are set to publish their updated sheep industry projections soon. It will be interesting to see if they are factoring in the high level of stock retention that the STR is demonstrating in their estimates for the flock size for the 2021 season and beyond.
A 7% gain in the flock this year could see the flock reach nearly 68.5 million head, compared to the current MLA forecast of 67.3 million head.