The sheep turnoff ratio (STR) is a useful signal to show if the national flock is in rebuild or liquidation phase. Historically, when the STR is above 14% we aren’t holding onto enough sheep in order to allow a rebuild and the flock goes into decline. Similarly, once we are below 14% for the STR then the flock has the capacity to rebuild.
The December 2021 release of the Australian Bureau of Statistics quarterly sheep and lamb slaughter data had a number of revisions to prior quarters. Previously we had reported a sheep turnoff ratio (STR) down to a record low of 8.3% as at the end of the September 2021 quarter. However, data revisions have seen this low pared back to 8.9% occurring in the June 2021. The September 2021 STR has now been revised up to 9.0%, based on the new ABS data.
Data for the December 2021 quarter has the STR lifting to 9.5% and as at the end of January 2022 the STR sits at 10%. The annual average STR for 2021 came in at 9.2% and as the scatter plot between the STR and the annual change to the flock highlights, the STR is a handy predictor of how the flock changes year on year. Based on an average annual STR of 10% (which is the figure for the 2022 season so far) this suggests a flock rebuild of nearly 7% is on the cards for this year, according to the line of best fit on the scatter plot, compared to the 5% gain in the flock that MLA are anticipating.
Bear in mind it is early days yet to put too much faith in the STR as a predictor for the magnitude of the 2022 flock rebuild as we are only basing it on the first months data. The EP3 team will keep a watchful eye on the data and report back regularly as we see how the season develops.