MEAT and Livestock Australia’s latest estimate for the national flock this year has been queried for being almost 6 million head higher than a Australian Bureau of Statistics-based estimate.
MLA yesterday forecast Australia’s sheep flock would reach 78.75 million this year; however, Global AgriTrends analyst Simon Quilty said this implied a 12 percent increase over the Australian Bureau of Statistics’ figure of 70.235m for 2021-22.
The ABS 2022 flock calculation was 70.235 million head, while the MLA’s estimate was 76.02 million.
Referring to his belief that MLA’s recent forecast for Australia’s beef herd this year were also too high, Mr Quilty said MLA was being consistent with their sheep flock estimates.
“One thing’s for sure, they are consistent, they are consistently high.”
Mr Quilty said there is a 5.55 million head difference between where he estimates Australia’s flock will reach this year, based on ABS figures, and what MLA has forecast. Mr Quilty estimates Australia’s flock will reach 73.2 million this year.
How does the ABS calculate its numbers
The ABS calculates its herd and flock numbers by including operations with an ‘estimated value of agricultural operations’ (EVAO) of $40,000 or more, whereas MLA’s 2023 forecasts are based on all sheep enterprises in the country.
The ABS told Sheep Central that the cattle herd and sheep flock numbers released in Agricultural Commodities, Australia 2021-22 (on 17 January 2023) were based on data from the Rural Environment and Agricultural Commodities Survey (REACS). The REACS is a sample survey and went to about 25,000 agricultural businesses, asking them about their farming activities for the year, including the number of sheep and cattle present on their holding as at 30 June 2022. Data from this survey is then aggregated and weighted to account for the total number of agricultural businesses in Australia with an Estimated Value of Agricultural Operations (EVAO) of $40,000 or greater.
The ABS adopted an EVAO range of $40,000 or greater from the 2015-16 Agricultural Census onwards, as this range was deemed to align annual agricultural collections with contemporary definitions of an agricultural business. The ABS does not make forward calculations or provide forecasts of cattle and sheep numbers.
For more information on the scope of the REACS, see Agricultural Commodities, Australia methodology, or for details on the move to an EVAO of $40,000 or greater, see Agricultural Census, Nature and Content, 2015-16.
How does MLA calculate its numbers
MLA said its sheep projections model utilised over 50 years of Australian Bureau of Statistics (ABS) data on the demographics of Australia’s sheep flock, including breakdowns into categories for ewes, lambs, and other sheep.
“The model is also underpinned by records back to 1900 in relation to El Nino and La Nina weather events from the Bureau of Meteorology (BOM), as well as 50 years of BOM rainfall data at a national level.
“The 2023 forecasts are based on all sheep enterprises in the country, not just those with an Estimated Value of Agricultural Operations (EVAO) over $40,000 per annum – the ABS only counts enterprises with a turnover of greater than $40k,” MLA said.
MLA said the ABS has noted that its data and its reliability has been significantly affected due to a reduced set of agricultural and productions stats, therefore Mr Quilty’s argument should be considered with caution. MLA noted a statement posted on the ABS website on 17 January about their data:
A reduced set of agricultural area and production statistics is available for the 2021-22 financial year. This is due to lower quality responses to the Rural Environment and Agricultural Commodities Survey, the main data input to this publication. More information is outlined in Changes in this and forthcoming issues.
MLA said Australian Wool Innovation’s forecast for the 2022 flock size was 74.6m head, which was 1.9pc or 1.42m head lower than MLA’s 2022 flock size forecast.
“This demonstrates that AWI, the other major sheep R&D and marketing body, is closely aligned with MLA.
“In the October wave of the revamped and redeveloped Sheep Producer Intentions Survey, 46pc of Australian sheep producers expected to increase their flock size and a further 28pc expected their flock size to remain the same from 2022 to 2023,” MLA said.
“47pc of producers with a flock size of 20,000 or more expected to increase numbers.
“All of the above figures indicate significant alignment with MLA forecasts for increase in flock numbers this year.”
MLA said Mr Quilty’s recent commentary about the total sheep flock and cattle herd size is inaccurate and should be scrutinised.
Mr Quilty said he accounted for the ABS’ EVAO policy and had compensated for smaller holdings, as he did with his cattle herd calculation that was 3 million higher than the recent MLA estimate.
“This time I come up with a 5.5 million head difference on sheep flock size.
“They (MLA) have taken it upon themselves to now ignore ABS numbers, for the first time in 40 years,” he said.
“I do know that they (ABS) are moving away from doing a survey to a more industry-based approach, but that doesn’t happen until next year.
“As far as I’m concerned, these ABS numbers make sense.”
Mr Quilty said the ABS figures show a flock increase of 3.2pc across Australia in 2022, down from the previous year’s increase of 7.1pc, reflecting a slowing in the flock rebuild.
Quilty supports resumption of ABS five-year census
The ABS figures also show that in Victoria, Western Australia and South Australia, the flock has fallen in size, but in New South Wales and Queensland it has lifted, but at the expense of cattle in marginal areas, Mr Quilty said.
“I think the ABS numbers are quite good and on a state-by-state basis they make sense.”
Mr Quilty hoped that the ABS’ move toward a more consultative approach would mean that there will be just “one industry number that we all agree upon.”
“But I am sorry that they are moving away from being objective with a survey.
“I wish they would take a consultative approach plus have the survey with objective numbers.”
Mr Quilty is worried that changes in the ABS methodology will make understanding trends difficult.
Yesterday Mr Quilty had a meeting with ABS and suggested that they re-introduce the five-year census survey as an important step to ensure as an industry that figures are anchored and based on actuals, and not on ‘guesstimates’.
“The five-year census is based on 125,000 farmers and is by far the most accurate method of calculating the herd and sheep flock,” he said.
“It is important to have a strong reference point to ensure the in-between years on industry discussions don’t go off track.
“To me the census is an important safety mechanism that ensures there is accuracy, and that the methodology used in the in-between years gets better,” Mr Quilty said.
“Since last week many major corporations, banks, farmers, and supply chain participants, including animal welfare groups have reached out to me worried about where MLA figures are heading.
“I am always concerned that the starting point of analysis is incorrect, which in turn will impact the next three years of estimates,” he said.
“Individuals are always pushing their own barrow and that’s why an independent survey has been so critical.
“It’s crucial as an industry we have this five-year census reintroduced to keep us all honest,” Mr Quilty said.
“People are making decisions based on accurate numbers – whether it be processing capacity or the numbers of people going into sheep or cattle – all these numbers give some guidance.”
Mr Quilty said he is also concerned that the MLA figures show a lack of understanding of the extent of the changes in land use occurring across Australia.
“It’s dramatic across Australia.
“You are getting serious amounts of land moving away from grazing to become non-agricultural use and also into cropping,” he said.
“Every state has its own reasons, but it’s very clear by the most recent numbers from the ABS that grazing land is being challenged.
“I think there is a long-term decline in the cattle herd and I to some extent I think the sheep flock will expand on the eastern seaboard, but contract in the west,” he said.
“There is a re-arranging of the deck chairs and in the long-term cattle is on the decline, though we are still going to get a peak in production next year, but overall beef’s production cycle is trending lower.”