Insight into the attitude of agribusiness regarding the Sheep Industry Business Innovation Project activities Agribusiness Survey 2016

Anne Jones and Mandy Curnow, March 2017

The Sheep Industry Business Innovation (SIBI) Project utilises the agribusiness consultant sector as its extension pathway; to channel information to, and build capacity of, sheep producers.

Over November and December 2016 the SIBI project invited Western Australian farm business, sheep and cropping consultants to participate in a survey. The survey included questions regarding where they source sheep management information and how they use such information from the Department of Agriculture and Food, Western Australia (DAFWA), what key SIBI messages and best practice behaviours they recommend to their clients, and their observations and attitude toward the state and future of the Western Australian (WA) sheep industry. Thirty eight (roughly 50% of) invitees, representing 853 combined years’ experience in the agricultural industry, generously contributed their thoughts. 

The SIBI project is made possible through funding from Royalties for Regions.

Supporting your success

ContentsMethodology....................................................................................................................1

Information about the respondents..................................................................................1

Geographic divide........................................................................................................1

Length of service to the sheep industry.......................................................................2

Diversity in experience and services provided by respondents...................................2

Respondent attitude to sheep in a farming system......................................................3

Source of information......................................................................................................5

Where consultants get their sheep management information from.............................5

Use of DAFWA information..........................................................................................6

Scrutiny of responses regarding non-use of DAFWA information...............................6

Knowledge of SIBI...........................................................................................................8

Attitude to SIBI outcomes............................................................................................8

The future of SIBI......................................................................................................10

Summary of this section............................................................................................10

Willingness to advise clients on key SIBI messages.....................................................11

Sheep management practices...................................................................................11

Business-focused practices.......................................................................................12

Observed trends and future of the sheep industry........................................................14

Sheep producer commitment to the sheep industry..................................................14

Inclusion / exclusion of sheep in the system..............................................................14

Decline of the WA sheep flock...................................................................................15

Motivation to increase sheep numbers......................................................................16

Consultants view of the value of sheep to an enterprise...........................................16

Summary of findings.....................................................................................................17

Appendix 1 – Responses to open questions.................................................................18

MethodologyThis survey was conducted using online technology (Survey Monkey). An email was sent to nearly 80 farm consultants, whether they were specifically involved in sheep production or not. The consideration was that sheep consultants would have a good understanding of why producers do or don’t have sheep, but that cropping specialist consultants could have some insights into this as well. If a respondent indicated that they had not consulted to any sheep producers in the previous year we assumed that they were likely cropping specialist consultants and skipped them past the sheep management related questions.

Emails were sent to directly to consultants and to the Australian Association of Agricultural Consultants with the request to forward to all of their consultant members, with a link to a Survey Monkey questionnaire. The survey was available for consultants to access from 31 October to 19 November 2016.

Information about the respondentsGeographic divideRespondents were asked: which rainfall zone do you work in most of the time? The response options were: Cereal Sheep Zone - <400 millimetres (mm)/year, or the Medium Winter Rainfall Zone - 400 to 600mm/year, with the option to tick both. A map was provided to assist respondents to answer this question.

The majority of consultants (47%) work in the Cereal Sheep Zone (CSZ) while 32% work in the Medium Rainfall Zone (MRZ) and 21% work in both.

Page 2 of 27

Figure 1 Map provided to identify location of the CSZ and MRZ

Length of service to the sheep industryRespondents were asked “How long (in years) have you been working as an agricultural consultant, including time in the public and private sectors?” The responses were grouped into ten-year spans.

0 to 10 11 to 20 21 to 30 31 to 40 >400

2

4

6

8

10

12

14

16

Years working as consultant (grouped)

Num

ber o

f res

pond

ents

Figure 2 Number of years that respondents reported they have been working as a consultant - grouped into ten-year brackets

The responses fall into a slightly left-skewed normal distribution pattern with a strong dominance in the middle ‘21 to 30 year’ bracket (39%).

Diversity in experience and services provided by respondentsRespondents were asked to “briefly describe your position and the services that you provide to producers”. This was an open question, which means that the respondents could type in whatever answer they wanted to provide. To manage the data, these responses were given a code that reflects generally, what the consultants said that they did. The results are shown in Table 1 below. Further, the raw responses provided on how many years they have worked in the industry have been used to calculate average years in the industry for each group.

Table 1 Number of years that respondents reported they have been working as a consultant - grouped into ten-year brackets

Categorised responses # (%) consultants Average yrs expFarm business consultant 20 (53%) 26.2 (+/-14.3)

Sheep production / research 7 (18%) 14.5 (+/-8.8)

Financial / Economist / Analyst 7 (18%) 14.5 (+/-9.8)

Agronomist 3 (8%) 12.5 (+/-7.5)

Unspecified 1 (3%) 24.0 (+/-0)

Respondents were asked: approximately how many sheep producers did you personally consult to last calendar year? Respondents were given multiple answers

Page 3 of 27

which they could choose one of. The responses, by consultant group, are shown in Diagram 3 below.

Figure 3 Volume of clientele for respondents in each service delivery category

The three respondents that said they didn’t consult to any sheep producers last year skipped ahead after this question to the questions about development of their clients’ business skills and barriers to the development of the sheep industry. The remaining 35 respondents will be referred to as ‘sheep consultants’.

Respondent attitude to sheep in a farming systemEach of the respondents answers were looked at and assessed to see if they were ‘generally positive’, ‘generally negative’ or ‘neither positive nor negative’ to the inclusion of sheep in a profitable farming system. The key questions informing this assessment were

1. Why do farmers include / exclude sheep in their business?2. Why do you think sheep numbers in WA are in steady decline and is it a concern?3. What would motivate farmers to increase sheep numbers and is the motivation

different in different areas?4. How much value does a sheep enterprise contribute to the cropping enterprise?5. Please rate your willingness to… invest in maintaining or improving

infrastructure / Invest in installing new sheep management related technology? (concatenation of two larger questions)

6. How would you describe the commitment among your clients to their future in the sheep industry?

The language used in the responses to these questions often clearly indicates the consultant position on sheep in the farming system. For example, if a respondent stated ‘sheep compromise crop in every single way’ then they would be classified as

Page 4 of 27

being ‘generally negative’ to the inclusion of sheep in the system. If the respondent used balanced, basic facts or unemotional language in their responses then they were categorised as ‘neither positive nor negative’.

The majority of respondents (24) were considered to be ‘generally positive’ toward the sheep enterprise. Three were ‘generally negative’ and 10 were somewhere in between. Due to the small number of respondents it is difficult to compare collective responses of each group. The three considered to be ‘generally negative’ are even within themselves a diverse group across zones, years in industry, number of clientele, etc. The only apparent consistency is that two of them describe themselves generally as a ‘consultant’ and one as an ‘advisor, management consultant’. Two of them described 100% of their clientele as primarily wool producers. They described their clients’ commitment to the sheep industry as ‘maintaining’ or ‘stable’. Despite negativity, two of them were still very willing to recommend clients invest in infrastructure and technology and one was unsure.

Page 5 of 27

Source of informationWhere consultants get their sheep management information from Sheep consultants were asked “Where do you get sheep management information to provide to your clients?” and provided with a list of options (including “other”).

Table 2 Number (#) and percent (%) of respondents that get sheep management information from the sources listed (in order of popularity)

Information source # (%) respondentsMeat & Livestock Australia (MLA) 29 (76%)DAFWA 27 (71%)Own 20 (53%)Australian Wool Innovation (AWI) 17 (45%)Cooperative Research Centres (CRCs) 15 (39%)Australian Association of Agricultural Consultants (AAAC) 14 (37%)Universities 9 (24%)Private research 7 (18%)

MLA is the most popular source of sheep management information, followed closely by DAFWA.

The responses offered under “other” sources included literature searches of refereed scientific publications, research papers and reports, industry hardware and software providers, Ovine Observer, farming press, historical Ag department notes and other sheep specialist consultants. The fact that two of these ‘other’ sources are actually DAFWA publications is curious. Perhaps respondents feel that these publications can’t really be attributed to DAFWA or that they somehow can’t be associated with the current DAFWA suite of publications.

Page 6 of 27

Use of DAFWA informationSheep consultants were asked “To what extent has information from DAFWA products and events (such as Sheep Updates, Feed-lotting workshops, feed budget calculators) influenced your recommendations to sheep production clients?” The majority of sheep consultants (74%) recommend DAFWA information to clients often or occasionally.

To add depth to this response, the average years’ experience of the respondent is included in Table 3. Many consultants with less than 10 years’ experience are unaware of DAFWA recommendations. Those that are aware of DAFWA recommendations are most likely to recommend DAFWA information occasionally, regardless of years of experience.

Table 3 Number (and percent) of sheep consultant respondents that use DAFWA information, broken down into ‘average years’ experience’ groups (0-10, 11-20, 21-30, 31-40, 41+ average years’ experience)

Frequency of use of DAFWA information 0 - 10 11 - 20 21 - 30 31 - 40 41+

Total # (%) respondent

sI often recommend information and tools from DAFWA

1 2 3 0 0 6 (18%)

I occasionally recommend DAFWA information and tools to clients

2 5 7 3 2 19 (56%)

I do not recommend DAFWA information as I do not find it to be of value

0 2 3 0 0 5 (15%)

I am unaware of DAFWAs recommendations on sheep management

3 0 0 1 0 4 (12%)

Of those that are unaware of DAFWAs recommendations, two from the least experienced group are financial/marketing advisors to industry professionals and one is an agronomist.

Scrutiny of responses regarding non-use of DAFWA informationThere were seven respondents that, when asked “Where do you get sheep management information to provide to your clients?” did not select DAFWA as a source. While two of them went on to say that they were unaware of DAFWA recommendations, and a further two that stated that they did not find DAFWA information to be valuable, three responded that they occasionally recommend DAFWA information to clients. Two of these three commented that they use Ovine Observer and historical DAFWA publications.

Page 7 of 27

Table 4 Additional comments on response to the question regarding use of DAFWA information

Frequency of use of DAFWA information

Additional comments

I often recommend information and tools from DAFWA

Condition score app, feed budget information,

I occasionally recommend DAFWA information and tools to clients

Farmnotes of old and the on line resources are useful, the above question is navel gazing

I use info from DAFWA amongst that which is provided to students as sources for them to use or reference material for teaching

Mainly use Feed Budgeting tools Most of the information I use is provided by the organisations I

train for and I use Sheep Genetics data bases a great deal. Mostly use personal communications with DAFWA staff as a

source of information. If information likely to be helpful to client then will recommend

DAFWA source Where appropriate Information needs dream lining and focusing as is to diverse

across organisation, needs to be more current a lot is old hat The good food guide for sheep is fantastic

I do not recommend DAFWA information as I do not find it to be of value

I find research information from Murdoch fabulous, MLA Friday Feedback and other national consultants more useful for clients. This is more up-to-date than DAFWA information.

I find it basic information for the low level farmer, not for where farmers could be.

I am unaware of DAFWAs recommendations on sheep management

DAFWA no longer at forefront of good research

This feedback could be summarised to say that, while the Lifetimewool products (Condition scoring and feed budgeting,) are still very useful, much of DAFWA’s information is considered to be basic information. DAFWA is not now considered to be at the forefront of research in sheep production and generally lacking in progressive thinking.

Page 8 of 27

Knowledge of SIBIRespondents were asked: “The Sheep Industry Business Innovation project (SIBI) is a Royalties for Regions project being run by DAFWA. Which one of the following statements best describes your current level of knowledge of SIBI?”; with the following options and responses described in the following table.

Table 5 Number (and percent) of respondents and their level of familiarity with SIBI activities

Knowledge of SIBI # (%) respondents

I am quite familiar with SIBI's activities and have a good understanding of the objectives of the project 7 (19%)

I am familiar with many of SIBIs activities 19 (51%)I have heard of SIBI but am unaware of its activities 7 (19%)I have never heard of SIBI 4 (11%)

Attitude to SIBI outcomesThis survey aimed to test consultants’ attitude to the outcomes SIBI is responsible for achieving. Respondents were asked: “The following list outlines some of the outcomes or focus of the SIBI project to support and strengthen the Western Australian sheep industry. Please rate the importance of these to the OVERALL SHEEP INDUSTRY.”

Respondents were provided with the following scale to assist in responding to this question: No importance = I don’t believe this activity will assist industry Somewhat important = this activity may result in small improvements in the industry

but limited resources should be allocated Quite important = this activity needs to be undertaken and could result in much

needed improvements in the industry Very important = this activity is a priority as it is likely to result in significant or

essential improvements in the industry I am unsure = I am not familiar enough with the topic or industry to make a

judgement

Figure 4 shows how respondents answered the question for each SIBI outcome.

Page 9 of 27

Figure 4 Proportion of respondents that consider SIBI activities to be very or quite important to the sheep industry

Generally, the most popular outcomes were those focusing on improving the production skills of producers, although developing their business skills and providing support and mechanisms for producers to better access markets was also seen to be very important. Around 50% of consultants could see the value in developing new sheep meat products and value chains.

The outcomes that fewer consultants felt had value were the development of new meat trade specialists and improving the understanding of the whole value chain. There may be two reasons why these options did not rate well. Firstly, these outcomes could be considered to be of benefit to very few people rather than the whole of industry. Secondly, respondents may be unclear as to what those outcomes mean to industry, let alone their priTablmary clientele, the producers.

Consultants were given the opportunity to add more to their responses via the follow-up question: “Do you have any comments relating to your responses to the question above?”. Generally, comments revolved around how Government should stick to research and on-farm production improvement (not value chain development), which is the driver of profitability and even industry development. Access to market and

Page 10 of 27

production information would be of benefit (although one consultant said that benchmarking is a complete waste of time for “individual producers”). There was one other comment on the importance of [industry’s] business, marketing, strategic and succession planning. The full list of responses can be seen in Appendix 1 (Q. 22).

The future of SIBI Respondents were then asked, “What other activities should be considered by SIBI in the two years remaining of the project?”

Seven consultants proposed that SIBI should be doing some combination of research and extension on production issues (specifically crop/sheep balance, feeding, pasture and labour issues and the profitability of improving genetics), with a further two specifically focusing on rangelands sheep production. One also commented that DAFWA sheep extension is too focused on “the Albany to Perth line”. Three responses focused on SIBI providing or promoting production training opportunities for producers and young staff. Two respondents felt that developing new products (hogget) or promoting a WA brand to be important activities. I respondent also expressed support for closer ties between DAFWA and the Sheep Alliance for a more cohesive industry.

The full list of comments submitted at this question can be read in Appendix 1 (Q. 23).

Summary of this sectionThe responses in this section show comprehensive support for the producer capacity raising aims of the SIBI Project, strong support for product development and marketing, but very little support for value chain development (including specialists and study tours).

Page 11 of 27

Willingness to advise clients on key SIBI messagesSheep management practicesRespondents were asked to “Please rate your willingness to advise your clients to use the following sheep management practices”, with these scale notes:

Not willing = I don’t believe this activity will assist any of my clients Somewhat willing = I will promote this activity to some of my clients if relevant Quite willing = I will promote this activity to many of my clients Very willing = I regularly advise most or all of my clients to undertake this activity Unsure = I need more information about the practice before deciding to advise

This question was only asked of those respondents that consult to sheep producers. The full results are shown on the table below.

Table 6 Number of sheep consultants that are not, somewhat, quite and very willing (or unsure) to advise on key SIBI messages

Practices Unsure Not Somewhat

Quite

Very

Develop a clearly defined breeding objective 2 3 5 7 17Purchase rams from breeders that focus on the traits important to your client 3 3 5 6 17

Purchase rams with ASBVs that progress their flock toward their breeding objective 2 3 4 5 20

Monitor the health of ewes through condition scoring 1 2 3 6 22

Conduct pregnancy scanning of ewes to determine litter size (i.e. dry, single, twin) 1 2 3 9 19

Group and manage ewes according to their nutritional requirements during pregnancy and lambing

1 2 1 13 17

Provide extra shelter for twin lambing ewes 4 5 7 10 8Select genetics for higher reproduction 1 4 7 9 13Include selection for flystrike resistance into their breeding program using ASBVs for wrinkle, breech cover, dag score or Faecal Worm Egg Count (FWEC)

2 4 8 7 13

Use alternative methods to mulesing to control flystrike 4 10 7 7 6

Renovate pastures or feedbase systems 1 1 3 6 23Run a higher stocking rate or increase pasture utilization 1 1 3 10 19

Enrol in a Lifetime Ewe Management course 2 3 4 8 17Enrol in a RamSelect workshop 3 6 5 10 10

Page 12 of 27

The top five practices that have more consultants very or quite willing to recommend them are:

1. Group and manage ewes according to their nutritional requirements during pregnancy and lambing at 88%

2. Renovate pastures or feedbase systems at 85%3. Run a higher stocking rate or increase pasture utilization at 85%4. Monitor the health of ewes through condition scoring at 82%5. Conduct pregnancy scanning of ewes to determine litter size (i.e. dry, single,

twin) at 82%

There was general support for all other practices listed (at least 59% were very or quite willing to advise clients to adopt the practice) except for “use alternative methods to mulesing to control flystrike”. Only 38% were quite or very willing to advise clients to do this.

Business-focused practicesAll respondents were asked to “Please rate your willingness to advise your clients to undertake the following business analysis and development activities” with the scale:

Not willing = I don’t believe this activity will assist any of my clients; Somewhat willing = I will promote this activity to some of my clients if relevant; Quite willing = I will promote this activity to many of my clients; Very willing = I regularly advise most or all of my clients to undertake this

activity; Unsure = I need more information about the practice before decided to advise

Table 7 Number of sheep consultants that are not, somewhat, quite and very willing (or unsure) to recommend undertaking these business focused activities.

Practices Unsure Not Somewhat Quite VeryUndertake detailed sheep production benchmarking on a regular basis 1 2 4 15 15

Compare profitability of different enterprises egg. sheep to cropping 2 No

data 5 9 21

Invest in maintaining or improving infrastructure to improve sheep management (for example shearing sheds, yards, feed carts, water supplies)

2 No data 5 12 18

Invest in installing new sheep management related technology to improve sheep management (for example electronic ID tags, automatic drafters)

2  No data 5 17 13

Invest in training for improved business skills 3 5 12 17

Develop a new business/investment model tosupply directly into a value chain for sheep meat 4 11 6 12 4

Page 13 of 27

All of these practices attracted responses that indicated that 81% of consultants were very or quite willing to advise their clients to undertake them, except for “invest in training for improved business skills” (78%) and “develop a new business/investment model to supply directly into a value chain for sheep meat” (43%).

Page 14 of 27

Observed trends and future of the sheep industryAll respondents to the survey were asked to make comment on questions regarding the state of sheep industry as reflected in the attitude and practices of their clients with sheep.

Sheep producer commitment to the sheep industryRespondents were asked: “How would you describe the commitment among your clients to their future in the sheep industry? For example: are they increasing, maintaining or decreasing their sheep flock? Is their enthusiasm for the sheep industry growing, peaked or waning?” This was an open question that allowed respondents to make their description any way they liked. Their responses were then grouped according to the general indications that they gave.

Table 7 Proportion of respondents that indicate the general attitude of their clients in terms of commitment for the sheep industry

Commitment % respondents

Decreasing 3%Maintaining 50%Increasing 47%

Table 8 Proportion of respondents that indicate the general attitude of their clients in terms of enthusiasm for the sheep industry

Enthusiasm % respondents

Waning 3%Steady 83%Enthusiastic 14%

Consultants observe that, overall, the commitment and enthusiasm for the sheep industry by producers is good. More insight into what this means can be drawn from combining these responses with the responses to the following four open-ended questions.

Inclusion/exclusion of sheep in the systemRespondents’ were asked “Why do farmers include / exclude sheep in their business?

The main reasons cited for why sheep are included in the system are for;

risk management, diversity of income, low cost input, weed management and nitrogen fertilisation, utilisation of non-arable and fallow areas and utilisation of poor crops and infrastructure.

Page 15 of 27

The main reasons why sheep are excluded are;

lifestyle and labour issues (such as objection to hard work, fear of disaster, lack of skills) compounded by poorly maintained or designed infrastructure,

lack of confidence in long-term price (along with longer term return than cropping), and

lack of adequate business and production analysis that shows producers how profitable their sheep are.

The influence of sales agronomists and machinery companies was also cited, with the long-term impact being that the skills, confidence and passion of producers for sheep has contracted considerably to those producers that are really keen and understand how to use sheep in the system. Low numbers of sheep on farms is also partly attributed to flock structure and high meat prices.

The full list of responses can be viewed at Appendix 1 (Q. 27).

Decline of the WA sheep flockRespondents were asked “Why do you think sheep numbers in WA are in steady decline and are it a concern?”

Respondents consider that a lack of ‘industry’ investment (including from DAFWA) into development of sheep systems and technologies, especially compared to investment in cropping systems, as one of the contributing factors to the decline as it indicates a lack of commitment to the industry (while the cropping industry looks more vibrant). Collectively this creates a lack of confidence in producers to maintain a sheep system.

One proposed reason for why we have been seeing a decline in sheep numbers for a long time now is one of numbers: producers have been buying more land but they don’t necessarily increase their flock size. This could explain why there has been a decline in the total sheep numbers in Western Australia even though some consultants are seeing increases in individual farmers flock sizes.

Eight respondents stated that the decline is of concern, particularly in terms of the impact it will have on the whole of chain / service providers within the industry (i.e. ongoing viability and availability of abattoirs, shearers, sales agents, etc.). Three respondents claimed not to be concerned about the reduced flock numbers, although one qualifies that the only reason they are not concerned is that the trend seems to be easing.

The full list of responses can be viewed at Appendix 1 (Q. 28).

Page 16 of 27

Motivation to increase sheep numbersAll respondents were asked: “What would motivate farmers to increase sheep numbers and is the motivation different in different areas?”

Twenty-one responses revolved around consistency in high prices (in particular forward prices) or profit (actual or even just understanding how profitable sheep systems can be). A couple of respondents claimed that the only difference in areas is that the profitability message would be easier to sell in the Medium Rainfall Zone.

Two comments inferred that sheep producers don’t make good business decisions about investment in sheep (specifically when to buy and sell sheep or investing in sheep handling infrastructure), and this needs to change. Three consultants commented that producers need to know how to take advantage of frost or otherwise bad cropping seasons. One respondent claimed that it would help if producers made objective measurements about their sheep enterprise.

One respondent said dedicated value chains would improve numbers, and another said that better marketing of sheep systems would. Another respondent claimed that there needed to be more interest by consultants.

The full list of responses can be viewed at Appendix 1 (Q. 29).

Consultants view of the value of sheep to an enterpriseRespondents were asked “How much value does a sheep enterprise contribute to the cropping enterprise?”. Seven respondents believe that the value of sheep is significant (at least potentially), 18 believes that there is some (six of whom qualify that, to determine how much, ‘depends’), five respondents believe they add little or nothing and two stated sheep are a hindrance to cropping.

This variety of responses may just signify how complex farming systems are and that what is appropriate for one farmer is not appropriate for another. There may also be a lack of understanding on the part of the consultants about how profitable and under what conditions sheep enterprises actually are.

The full list of responses can be viewed at Appendix 1 (Q. 30).

Page 17 of 27

Summary of findingsWhile most consultants believe that sheep play an important or essential role in WA farming systems, they qualify that there are places and businesses where sheep have a better fit than others. In essence, this comes down to environment (sheep gross margins are more competitive in the higher rainfall areas) and the ability of producers to manage a holistic system where pasture (and hence sheep) compliment the cropping rotation.

In the consultants view, DAFWA and SIBI should be focusing its efforts on research and development activities that modernise the sheep industry at the farm production and business level. While the consultants do not explicitly state the importance of extension, it is clear that robust extension and communication strategies that recognise the diversity of businesses is needed to gain value from the research. Providing access to cutting-edge research and development through publications and training opportunities not only facilitates the growth of sheep producers’ capacity but presents the sheep industry as vibrant, progressive and worthy of producers investment. Young agribusiness staff will also gain the benefit.

Consultants expressed a sense of great enthusiasm in producers for their sheep enterprise, likely buoyed by current healthy market prices. There is an opportunity for DAFWA to capitalise on this enthusiasm and partner with agribusiness and producers to progress the sheep industry right now.

Page 18 of 27

Appendix 1 – Responses to open questionsQ. 22 Do you have any comments relating to your responses to the question [on importance of SIBI outcomes]?

Any involvement in the value chain should be left to commercial interests. It is not the role of government other than to respond to specific requests to resolve technical or regulatory matters via R&/or D.A better understanding of SIBI's objectives and focus might have altered my assessment Improved access to market & product information - this would only be useful to me as a farmer if I could get individual carcase feedback on my lambs so that I knew exactly what I was producing…and then link it back to market requirements. I could then alter breeding and production objectives to better meet these market specifications. At the minute I am flying blind. Profit drives progress - unless producers have a good margin, the industry will never expand Quality and out of season production is not being paid for.from the producers view point, production. it is what they have control over.Benchmarking a complete waste of time for individual producers Production Research & Development they key to improving productivity and therefore profitability. Overall focus on return per hectare and growing the flock.Need to focus on production not downstream processing or marketing; this is the role of the private sector ~ processors/exporters/wholesalers/retailersWe should concentrate on production and leave marketing to others Where's the research?business and marketing skills very important, agri-business strategic planning, including succession I don't provide advice to producers directly, instead I advise government and industry bodies. So not as close to these objectivesYes focus on farm and leave off farm to the industry supply chain , you can't be all things to all people. Genetics will give you the biggest bang for your scarce $$s

Q. 23 What other activities should be considered by SIBI in the two years remaining of the project?Concentrate efforts on technical training, forget value chainSouthern Rangelands Management regional requirements General promotion of sheep activities - e.g. get involved in an LTEM / Ram Select group. Support for consultancies to build sheep advice capacity - training days, general promotion, and project management opportunities for young staff. keep it simple, more extension that can be on demand such as how to production video'sProductivity extension Determining how producers will be paid for adopting the use of genomic ASBVs for meat eating quality traits. At present there is no incentive for them to adopt these ASBVs, yet they will be the most important quality to consumers when making purchasing decisions.Virtually every livestock farmer is only achieving a fraction of what is possible. I would

Page 19 of 27

Q. 23 What other activities should be considered by SIBI in the two years remaining of the project?dearly, dearly like to see extension showing farmers what is possible, not what some of the best farmers are doing. There is far far more profit to be achieved. I find the DAFWA's extension catering only for the current average farmers, not for where they could be. Not 20% improvements, but 300+% improvements in profitability.Mentoring of younger farmers by top producers has worked well50% of WA sheep are in a line from Perth to Albany, hence 50% are outside that area. Get outside that area to have an influence because at the moment you are faceless (no profile)Working collaboratively with the Sheep Alliance - some cohesiveness in the industry would be a sensation. Capitalise on the frost risk and balance of mixed farming. Increased sheep into the wheatbelt, support of the Rangeland sheep cells.Increasing pasture utilization; stocking rate; pasture improvement ~ these will lead to significant productivity gains in the on-farm sector of the sheep industryoptimising a profitable farm system that involves less in paddock time working by hand with sheep. reducing the demands of sheep during peak cropping timesEnhanced benchmarkingCore research but I fear this skillset is no longer within DAFWAWA brand developmentFOCUS on the solvable prioritiesDeveloping a high value market for hogget - is a no brainer - however it needs to be re-branded - Hogget is the wrong name - e.g. jumbo lamb - Prime big lamb - Needs marketing expertise to develop a new brand name - Perhaps you should ask Sam K to come up with a name

Q. 27 Why do farmers include / exclude sheep in their business?

Diversity profit risk management suits land suits infrastructureToo much work + lack of a forward price curve and supply agreements from processors + lack of objectivity in measurement of individual animalsProfit Risk management DiversificationThey like sheep. Allows them to move in and out of enterprises easier. Maintains property infrastructure.Exclude for Lifestyle, Management, Labour issues Include to minimise risk and utilise non arable areas, continuous cropping was not working, and cropping inputs keep getting more expensive.weed resistance nitrogen fixation / resting of soilsPart of the rotation there is no denying there gross margin in the last couple of years. risk management with frost Liquid assetNormally for lifestyle reasons, rather than economic ones. Waning lack of enthusiasm from the younger generation as a whole for the hard work involved in running a sheep flock.It is about the farmer's passion for sheep or not. Unfortunately we lost 15-20 years for the sheep enterprise, at that time, low meat/wool commodity prices, higher grain prices, shiny toys and major technological productivity gains = higher returns for cropping enterprises. We lost skills, confidence, and passion for sheep. Those clients who remained in sheep are performing very well, because they have invested into increased productivity strategies.

Page 20 of 27

Q. 27 Why do farmers include / exclude sheep in their business?

In general there is a sad lack of business analysis (proper analysis over the whole farm!) and ignorance of the potential of sheep to be profitable. But most of all, because cropping has two very potent marketing tools - sales agronomists and machinery companies. These gentleman have a strong financial interest in getting more farmers to crop, for them to increase crop area and for farmers not to drop crop out of their farm system.Profit, income diversity, rotational benefits,The sheep industry generally runs a positive message about profitability and increasing numbers. There is also a constant message of sheep as a lower risk enterprise. This is historically not the case for many medium rainfall producers. I have seen one client so far go from 100% crop back to include a sheep enterprise and this was because of a significant area of waterlogging country. At this stage, numbers are only likely to increase in farms that already have sheep. I doubt whether many cropping only farms will go back to sheep. It is pretty exciting for long time sheep producers to be making money from this enterprise for a change. I have been surprised to find recently that expert sheep consultants are still using outdated and nonsensical measures of winter grazing stocking rate- often ignoring ewe body weight and stage of pregnancy in this benchmark factor.Exclude: Perceived less profitability, too much time for financial return, hate sheep... Include: More profitable than crops, love sheep, less capital cost, more upside in profit.Risk management, profit, skills, land use.Risk management. High profitability returns for well-run sheep flock are similar to crop returns. The no money in sheep lie. Don’t like sheep. Labour issuesto include: Main driver is areas of their farm that cannot be cropped. Adopting livestock here increases effective hectares. second main reason is philosophical belief sheep have a role, or that the farmer simply enjoys having them on farm finances currently not really the main driver To exclude: too much land degradation do not provide enough cash flow to service debt don’t have the infrastructure does not fit the business model we currently have just can’t stock enough to make them profitable AND have a reasonable exit clause when that next disaster comes alongTo support the crop rotation - weeds and N fertiliser Diversifying income. Stabilising income derive income from non-cropping land. Exclude Labour required vs mechanisation of crop perception on the low profitability of sheep vs crop Simplify farm operation$$$$$. Management ability in livestockToo hard and interferes with the 'lifestyle' demands. Not seen as sexy - until a frost comes along. Rangelands management issues Carry on about compaction. Clearly ha for ha - grain is a better GM, however YIYO as a balance it’s a good adjunct.risk mitigation, enjoy/don't enjoy it, cash flowView they are less profitable compared to crops. Prefer crops to livestock.they don't to work as hard on the sheep enterprise as their dad and want to be able to get awayNot as profitable as cropping, don't have temperament for livestock, sheep don't generate the income to maintain infrastructure.They have been misled regarding the profitability and requirement of the sheep enterprise. They do not understand "risk management" by the use of sheep. They have not applied the same rigour to sheep as they have to crop. Nor the same

Page 21 of 27

Q. 27 Why do farmers include / exclude sheep in their business?

investment for the future.1. Profit 2. Ease of management 3. Price fluctuationsinclude profit. exclude time consuming and lack of skill and knowledgeTradition, existing skills, easy to manage, diversification, flexibility to focus on wool, lambMaintain existing production mix Alternative source of income Support cash flow profitability perceived to be inferior to other farm enterprises and in switching the capital investment drives them to increase scale to get a payoff from that investment. Hand-cuffed to the shiny machinery.Sheep are still considered 'a lot of work' - primarily because of poor on-farm infrastructure/yards/sheds etc. and numbers/growth potential are restricted because of this mentality Most producers would not be aware that well managed flocks with improved weaning rates and reduced costs of production would outperform other ag enterprises - and they continue to accept mediocrity Many include sheep as part of their cropping program/weed management but numbers are below historical highs in terms of the weather portions retained due to high sheep meat returns. Producers are now looking at retaining more wethers to be used as part of a whole-farm operationReduce risk Compares profit wise to crop RotationLabour is the big issue - life style and dad retiring History of lower returns - hard work

Page 22 of 27

Q. 28 Why do you think sheep numbers in WA are in steady decline and is it a concern?lack of confidence associated with widespread disinvestment in sheep, including DAFWAAll of the above!Profitability in wheatbelt lower than crop. Income less than 10% so effort should equal returnsAs farms have got larger, sheep numbers per farm have stayed the same. There is a lack of adoption of new on-farm technology that matches the wow of cropping. Cropping has been more profitable, with a greater upside risk, but now sheep are competing equally for gross margins.Many producers who still have sheep still have the same number of sheep - but they own more landlack of profitability , especially compared to the Eastern Statesslow decline, yes it is a concern as the industry is fighting for an ever smaller pie, it must be affecting the profitability post farm gate and at some point this will be a disincentive to be in the industry again effecting supply and demand.As Above, many producers excited the industry due to economic reasons a decade ago and once the sheep have gone they don’t want them back.As per above, meat prices high so as many sheep are being sold, although the increased wool price may change this. It is a major concern, although we hope productivity gains will keep up with demand.see above - makes no real economic senseThis is curious to me as all of my clients except one are planning to increase sheep numbers. The one that is not has recently been diagnosed with OJD and is weighing up their options.farmers (especially younger farmers) who like sheep are becoming fewer, variable seasons have meant poor pastures for sheep, crop profit has been thought to be better than sheepSheep have only just become profitable enough to compete for rotation. It does not concern me if the numbers do not improve.Yes it’s a concern. Poor extension of what is possible with livestock. When it is possible to demonstrate 3 times more profit with sheep than cropping, why isn't DAFWA doing that?Price/ relative profits. NoIf so yesToo many barriers (shearing, live export, matching feed supply and demand). It’s just too hard. Probably a concern as the decline is slowing, probably to a level that the industry can sustain. the worry will be the support infrastructure (shearers, sales agents, transport companies) sufficiently spread over the state to service the needs.Over inflated view of crop profitability and under estimating sheep profits.$$$Yes it is a concern - a more united industry required up and down the chain. A better educated livestock agent required.cropping is less time intensive, hasn’t always had as good returns relative to crops, lifestyleDrought 2010, dry year/lack of water 2015; believe sheep numbers will increase in 2017Farmers don't value the benefits of a mixed system as much as they used to. It's a concern with resistance

Page 23 of 27

Q. 28 Why do you think sheep numbers in WA are in steady decline and is it a concern?I still see more clients moving from sheep to cropping, if current higher prices remain this may change. I am concerned about the long term viability of the sheep enterprise in Western Australian with the reduction in sheep numbersLately because of adverse seasons. Very concerning.GMs compared to croppingcropping potentially more profitable, season variabilityCan be more labour intensive than cropping, aging farmers easier to sit on tractor. However if wool remains strong and grain prices low, sheep should come backLack of historic ProfitabilityStrong memories of the many consecutive tough years producing wool for little return, so when prices are good, they sell down.Too long an emphasis on cropping despite the many benefits of sheep within cropping or stand-alone grazing enterprises/systems. Producers are 'tied' in re cropping because of capital costs and sheep are a poor second cousin. Poor reproduction/weaning rates are a primary concern and another reason why many see sheep as a difficult, lower performing enterprise.Lack of industry progress in 50 years ,lack of productivity improvement , still very traditional stud stock , work loadLet market forces prevail - sheep industry needs to reward growers more like they are known - processors only ever pay what they have to to get sheep - they don’t care about the producer.

Q. 29 What would motivate farmers to increase sheep numbers and is the motivation different in different areas?Profit and security thereofObjectivity in measurement a forward price curve that a producer can contract volume againstProfitabilityMotivation is the desire to run a balanced farm - yes different motivations in different areas because of cropping returns & soil constraints...Consistent price signals and contracts would help with confidence, and the more frosts the more interest there is in sheep. But farmers buy in when prices are high and sell out when prices fall. This is the biggest killer of sheep.Price , price ,price - no , no, noprofit,Education that the economics stand up and may lower the overall capital risk to the business. Proof that the work is not as hard as they think is the investment in the right handling equipment is made.Continued increased commodity prices will encourage clients to potentially increase pasture hectares, thus numbers, mainly in the high and west-medium rainfall districts.Better marketing of sheep systems - there is aReliable prices with an opportunity to forward sell their produce.big shift in relative profit with cropProfit. Exposure to frost risk. Better handling gear and infrastructure. More interest from their consultants!

Page 24 of 27

Q. 29 What would motivate farmers to increase sheep numbers and is the motivation different in different areas?Demonstrate to them what is possible. Show a demonstration farm doing things properly!Very high pricesRisk management and better management leading to better returnsFor the Geraldton port zone, significant change in fundamental economics between crop and livestock is required, and by change I mean quantum change. They are so far behind crop profitability it is not funny.Better understanding of profits in sheep, more positive image in rural areas.Different. Nothing in wheatbelt, only in HRZ if they have scale.Balanced information, the odd frost crisis (2016) or dry finish (2015), cost of machinery replacement rising, gross margins still skinny.profit, relative to time and area required to grow sheepEconomics sheep v cropsprofitSustained increased prices for wool and meat. I think that there might be more motivation to move towards sheep in the higher rainfall area as canola becomes more challengingThe current high prices but also demonstrations of the very profit of the sheep enterprise and its importance to the overall farm businessProfitdedicated value chains, locked in markets, steady market price rather than up and downpricesImproved and sustainable profitabilityBetter relative terms of trade. DesperationMaintaining wool returns at or above current levels (say 1250+c/kg) will be a big incentive. WA sheep meat prices need to improve to match eastern states rates if possible as well as lamb and mutton returns frequently fall 100-150c/kg below the ES values.Higher prices and so profit$ - mechanisation for young farmers

Q30. How much value does a sheep enterprise contribute to the cropping enterprise?not muchSignificant: risk diversification, weed management, post-harvest grazing benefitsSome. Varies depending on farmNext PhD project please…We don't know for sure, but can put some qualitative answers around it such as weed control, N input, pasture is the major break crop used in WA.Complicated interaction between weeds, ground cover, paddock size, water reliability, N, use of stubbles.difficult to answer, there is a fitI don't differentiate; it works as a total rotational profit.Good manipulated clover pastures for nitrogen and disease free, topography with medium-high frost risk.

Page 25 of 27

Q30. How much value does a sheep enterprise contribute to the cropping enterprise?Depends how it is done, but potential is high.Most of my clients have livestock as their primary business. Cropping is typically used to support the livestock enterprises.weed and disease control, subclover pastures increase fertility, big negative is soil compaction from winter grazingHmm how long is a piece of string? Weed control questionable "0" arguments for benefit and detriment are somewhere around equal. Nitrogen depends upon rainfall and pasture quality, but somewhere between $20 and $60/ha.Ideally, nothing.Not muchHuge valueNone. Don’t fall for that crap that sheep compliment crop, it is the complete opposite. Sheep compromise crops in every single way. They consume too much time and space, right when you need to get things exactly right in the cropping enterprise. They provide zero value to the cropping enterprise.For high level success crop people not much. Average farmers in central wheatbelt to high rainfall area quite considerable.Negative contribution, that's the problem.Risk management, stubble usage, better time management if applied and not traditional activitiesA lot if run well. Very little if not.? 10%; depends on whether legumes in pasture still present; if present up to 25% via stored NVery much by helping managing weed resistance but also some paddocks aren't profitable for cropping ever.Has a limited impact. Does mean that areas not suitable for cropping do have an enterprise run on it.In the region of 50%Work well together, sheep on less production/frost prone country& weed control. It gives options.depends on the set up and on the objectives of the business and their particular skill, knowledge and interest20%Very dependent on the relative sizes - 0 to 15% usuallySignificant but difficult to assign a value or number to. Weed management and reduction in costs are a major contributor to cropping particularly with increasing resistanceThis varies and is not simple to answerLots - weed control - n fixing - frost risk management -

Page 26 of 27