Why have all the sheep gone?

While undertaking a recent consultancy for an agribusiness company, I had cause to reflect on international sheep numbers.  Here in New Zealand, sheep numbers have been in decline for nearly 25 years.  We now have less than 35 million sheep whereas in the early 1980s we had 70 million.  In Australia, they used to have 150 million about 20 years ago, but the 2009 figure is only 76 million. Argentina is down from about 24 million to about 12 million.   Uruguay is down to 9 million from 24 million.  Britain, France, Spain, Italy, Turkey and South Africa are also in decline.  In the 1940s the USA had about 50 million sheep, but by 2008 they had less than 6 million and numbers were still declining.

According to FAOSTAT, which is the international agriculture database of FAO (the Food and Agriculture Organisation of the United Nations), the world’s biggest sheep flock is in China, with 136 million in 2008. Chinese sheep numbers peaked in 2005 at 152 million.

Surprisingly, given this widespread decline across the developed world, and also more recently in China, FAOSTAT  shows almost no overall change in global sheep numbers between 1999 and 2008, at just over a billion, (the most recent date for which figures are available). But closer inspection shows that numbers have only held up because of increases in countries such as Syria, Pakistan, Sudan, Russia, Kazakhstan and Nigeria.  Both the reliability of the statistics and the productivity of sheep in these countries are open to question. In some cases the recent upturn is related to countries coming out of war or other turmoil.

In looking across a range of countries that can be considered as having ‘modern’ industries, there are both common and different causes for the decline. Here in New Zealand, the  fundamental reason is that the international wool industry has been in decline for about 40 years. Traditionally, sheep farming relied on income from both wool and meat, with wool returns being the dominant income source up until at least the 1960s. These days, the coarse wool produced by the sheep that are used for meat production is little more than a nuisance.  Unfortunately, sheep are not particularly easy animals to farm, and it is difficult to be profitable from meat alone.  On the better country, sheep farms have therefore been converted to dairy farms, while on the hills, the land use has changed to forestry.

In Australia the situation is somewhat similar but the specifics are different.  The Australian sheep industry was traditionally based on fine wool production, and that too has been in decline.  But on much of the Australian sheep lands there are few options. Some farms have shifted their focus to wheat, but that does not explain all of the decline. There is another reality on the Australian grasslands, and that is environmental degradation. Nutrients have been depleted and carrying capacity has declined.

I do not fully understand the decline of the North American sheep industry, but a lot of it has to do with predators. In the American environment, sheep need to be closely shepherded, and that is inconsistent with low cost operations.  It is much easier to ranch cattle.

In Argentina the sheep farming has traditionally been in Patagonia, and the main focus has been on wool. Low wool prices together with minimal fertiliser applications have led to overstocking, depletion of nutrients, and land degradation.

In Uruguay the decline is mainly due to economic competition from cattle, cropping, and also to some extent from production forestry using Australian eucalypts.  Uruguayan lamb supply chains are somewhat dysfunctional.

Although sheep numbers in China have apparently only declined by 10% between 2005 and 2008, I expect this decline to continue. The Chinese grasslands are heavily degraded and there are no easy solutions. In late 2008, I observed large tracts of land in Inner Mongolia (see photo), on the edge of the Gobi desert, from which the sheep had been removed by Government decree.  Six months later in the following spring there were no signs of restoration. It is going to be a long journey back, and sheep numbers will never again reach the 2005 pinnacle.

So what is the ‘big picture message’ out of all of this?

There are at least two answers which inter-relate. The first is that sheep tend to be farmed on fragile lands, and many of these are in decline world wide. The second message is that sheep are not easy creatures to farm.  They are susceptible to predators, and they are also susceptible to disease once farmed outside the arid and Mediterranean environments where they evolved.  If the global sheep industry should ever boom again, then it will either be because new and profitable uses are found for wool (and it would be a brave person to bet on that) or else new markets need to be developed for lamb, where consumers are prepared to pay big premiums for lamb over other meats. It’s not impossible, and well worth a try, but it is going to be a challenge.

Keith Woodford
Professor of Farm Management and Agribusiness
Lincoln University