More Asian wool and sheep meat exports a 'shear thing'

Former local Nathan Wessling and Conmurra farmer Lachie Seears were part of an ANZ customer delegation in March that travelled to Asia to learn more about the future of sheep exports to the continent.

Mr Wessling is the Chief Financial Officer of AJ and PA McBride Ltd, and explained that on their tour of Inner Mongolia, Shanghai and Singapore, they discovered the future of Australian exports is positive.

"Whilst sheep and wool are niche products in their respective commodity classes (meat and fibre), Australian produced produce has a very high reputation in Asia," he said.

"This is particularly evident with the emerging middle class in China, who are increasingly focused on food safety, the environment and provenance. The future is positive for wool, with Chinese domestic consumption about to surpass exports for the first time.

"We will never be able to affect the quantity of product consumed in Asia - Australia is too small a producer; but our big opportunity is towards supplying quality produce. We have a reputation that we can and should maintain."

Mr Wessling explained that due to consumers generally being unfamiliar with lamb and different fibre varieties, the target market audience is instead apparel manufacturers and restaurants.

Due to Australia and New Zealand producing 80 per cent of the world's sheep meat, and Australia having the highest global share of the wool market, our country is essentially "the master of its own destiny".

"Added to this, restrictions on pork sales due to African swine flu and South African imports due to the foot and mouth outbreak are further supporting the market," Mr Wessling said.

"The main issue that is constraining future growth is supply - both seasonally with drought affecting much of Australia's pastoral and grazing areas; but also the ability to scale up a sheep enterprise due to capital constraints."

These constraints are linked to competing for land with beef and grain, which are also seeing good returns.

The full report that was released in Shanghai on March 26, Shear Opportunities, can be accessed here.