SSF spotlight: Ensuring a financially resilient industry

While safety and environmental sustainability are crucial to the growth of the Australian sheep industry, its long-term success depends on continued financial viability.

‘Ensuring a financially resilient industry’ is one of the four key pillars of the Sheep Sustainability Framework (SSF), with metrics focused on profitability, productivity, investment, and market access.

The 2024 SSF Annual Report used these metrics to assess the indsutry’s financial resilience, highlighting both progress and challenges, as well as introducing new benchmarks. 

Adding industry value

The gross value of production in Australia has grown, with increases recorded in both sheepmeat and greasy wool.

Greasy wool experienced the greater growth in FY23, rising by 18.9% to $3.14 billion since FY21. Over the same period, the gross value of Australian sheepmeat production increased by 2.9% to $4.55 billion.

While both commodities increased in value, the share of Australian sheepmeat, sheep offal and live sheep exports covered by preferential trade agreements (PTAs) declined by 3.8%, falling to 71.7%. In contrast, greasy wool exports under rose by 6.9%, reaching 90%.

Compliance with product integrity and safety standards, which are critical to meeting customer expectations, remained stable for both commodities.

The proportion of the wool clip produced under a voluntary product integrity scheme remained steady at 13%.

Chemical residue compliance in sheepmeat remained high at 99.91%, monitored by the National Residue Survey (NRS), through both random and targeted testing programs.

New metrics

To maintain relevance and continue adding value for the industry, new metrics are regularly added to the framework. In 2024, two new measures were added to better assess the industry’s financial resilience.

The first new metric, ‘Cumulative alleviation (from 2020) of red meat non-tariff barriers’ (NTBs) recognises challenges such as import restrictions, export clearance delays and unnecessary sanitary requirements.

Reducing NTBs is essential to enhancing international competitiveness. This metric supports the Red Meat 2030 target of alleviating $1 billion worth of NTBs by 2030. As of FY23, cumulative alleviation reached $474 million, up from $380 million in FY22.

The second enhancement was an update to the rate of return metric, which now uses a five-year rolling average. This change is designed to provide a longer-term view of industry profitability and investment, smoothing out short-term market fluctuations.

By broadening the time horizon, the SSF aims to offer a more stable and accurate picture of the industry’s financial performance over time.