 The dynamics of the Australian flock are opportunities and challenges and I probably in some ways I feel a bit like Big Kev. I'm excited where the industry is at, but I'm probably more excited about where it can go and I'll try and bring you a bit closer to what's happening in the paddock as well as linking it to the outlook. So that's kind of my challenge. There is serious pressure on globally to feed and clothe the masses and I think you can see in that slide pretty simply. There's a major disjoint between the global population and the sheep population. So our proteins like meat and wool are rare and expensive. You know, you've only got to go to the supermarket to buy lamb to see how much its price differential is between other products. So there's a lot of pressure on, but we are tending to be more in the quality game. One of the things I find really intriguing always about the forecast is we're going to have more sheep with a return to normal seasons. That's the standard line and as a farmer myself that's an interesting conundrum. But who does that at home in your family? Well I might be a tad old fashioned, but I'm one of six kids and the person that was the engine room of our flock was my mum. And the person that's going to bridge that disjoint between our sheep flock or the individual that's going to do it between our sheep flock and the population is the you. The you is absolutely the engine room of the business. We've got about 40 million of them. You would have to mount a really good case for me to believe that that's going to go upwards. Just simply because each you that ends up empty or is cast for age or whatever they're towards $100 in value. We need cash flows producers, cash flows king. So there's downward pressure on retaining years from that point of view as well as a whole lot of other things. So let's say we've got to produce more from less. That's basically the challenge that we've got. And we're asking a hell of a lot of this unit, this engine room of our business. We want to run plenty of them. We wanted to grow quality wool and still plenty of that. We wanted to produce lambs and by the way we wanted to look after our self pretty well, cope with worm burdens and deliver a lamb that will get up and thrive and survive. But then in addition to that the you provides not only half the genetic merit of the progeny, influencing all those outcomes you can see on the right, but in addition to that she provides the maternal environment. And we put a lot of emphasis into the ramp and what you're buying in the Rams, but I think it's time that we take stock and really focus on who really counts in this game. So my next slide talks about where is she at. Now back in the stockpile days we used to have about 80 million breeding years. That sort of number and we've halved the engine room of the business. That's successfully what we've done. But there's a deeper story in this slide than that. You can see when we went through the phase sort of from about 2004 to 2009 say that there was a parallel reduction in the flock numbers of all use and merino use. In that timeframe merino is constituted and have historically about 85% of the national flock. But what you can notice is, and there's a little bit of concern about one data point here, what you can notice is almost like a decoupling of what's happening with the merino-U population and the overall population. Or another way of saying it is there's certainly evidence of displacement of merino use for non-merino use. And in fact if you want me to present it a different way here, there's been a doubling of the non-merino-U component of the flock, which is the green component. Historically we've had about two thoughts join merino to merino and in the order of 15 to 20% of merino use gone to other size. What happened around the same time as the global financial crisis, this meron component here, merino use to other size, doubled. And we had about 35 to 40% of use went into this category. And what happened at that turning point is we've bred a whole heap of non-merino daughters that were kept and we've taken a step jump down in the merino to merino matings and that's rolled along now for two or three seasons at basically 50% of the national flock. There's a subsequent story I want you to pick up out of this and that is the average reproduction rates that is lambs marked to use joined in each of these categories. It's basically around 80% for merinos, 90% for merinos joined to other breeds and about 105 for these non-merino use joined predominantly to non-merino breeds. If you multiply that out, what's quite interesting is about 35% say in four or five years time of the use being born, the young use being born will be pure merinos. So this is a flock that grew up. My old man used to say we grew up on the back of sheep. Reality is our industry grew up on the back of wool. So what I'm saying to you within two or three years time around a third of the females being born will be pure merinos which is a massive shift in the industry compared to where we have been. What are her lambs worth? So I'm taking a bit of a journey on what this use not only up against but also how we're deriving value from her basically but this is part of a big reproduction plan that was led by John Young who's an economist and basically looked at the impact of the value of meat price on the value of an extra lamb. Now you're going to think that these prices say $5 for lamb delivers more than a $52 lamb in the marketplace. Absolutely it does. The lamb will be more like $100 to $110 with its carcass weight and its skin value. This is basically the marginal return on that lamb after the costs of selling, cost of production. The cost of sustaining for example if you're going to increase lamb marking rate you're going to have to feed the use more appropriately during pregnancy. If more lambs survive birth they don't live on fresh air through that lactation phase. So this is like the marginal return on those numbers and you can see that the value of an extra lamb in a merino to merino self-replacing flock with a $3 to $5 shift in meat prices is doubling. And this is an interesting journey I'll come back and talk about but there's some people in the merino industry that are grabbing hold of this and doing exactly what you said and focusing on what I would call total productivity. There are others that are still focused on the traditional way of deriving return out of the merino enterprise and I'll come back to that. Well both self-replacing flocks were modelling there. So how's she going? How many lambs is this girl raring? Well you can see this is all used in here and I gave you a bit of a heads up on the different flock categories around these numbers earlier but the trends were pretty flat and a long time for years we spent it around 80% lambs marked to use join and in recent times that start to kick up. The biggest step-wise leap links exactly to where there was this displacement of knowledge data set we look at Paul but somewhere between sort of 8 to 10 million merino use have been displaced for use of other breeds. That accounts for about half of that shift because those use of other breeds are on average a higher reproduction category. More favourable seasons in here correlates with the peak. What I'm really interested in is how this will be sustained over time. But this slide has a bit of a link into the next one. The next one is we're on about investment here and what I want to do is talk a little bit about industry investment and an individual growers investment but overall her stocks are rising and post the stock pile here if we look at the total gross value of production derived from sheep in total value it's gone up by about 2 billion and that's predominantly be driven through this explosion in meat demand and meat prices. But if we plot that out and look at the increase in the value of production per annum back divided by the number of sheep at that time and her stocks are absolutely rising. Yeah, they've risen quicker on the meat side than on the wool side but the two combined together are giving pretty handsome returns. What I am a little interested in I recompose the stockpile it came to a new sort of bit of a set of an equilibrium but 0.607 coincides exactly when that marking rate started to really crank up so we're producing more animals and the animal value has started to rise in the lamb side of things and there's certainly been a bit of favourable time on the wool side as well and in the forecast that was given yesterday and again this morning. What I take from this I don't care when I'm presenting to sheep producers which camp they're in but for our industry and for them they've minimised their total returns it's got to be about total productivity and the animal that actually has three great commodities in one enterprise is the self-replacing merino flock. You can produce wool, you can produce meat and you also produce another commodity which maybe we don't have as good a measure on but that's that surplus you that you're selling into the marketplace and her stocks are absolutely rising. So what's unique compared to the cropping industry is you've got three commodities tied up in the one enterprise and no wonder that the self-replacing merino enterprise is very complementary with managing risk in a mixed farming system. So at the farm level that was a bit of an industry level at the farm level what's setting the top producers apart. Now this is where things have started to evolve. Historically the way to skin the cat in the wool industry and it was absolutely a big part of my background was to maximise the number of views you ran per hectare drive that as hard as possible with a view to lower the cost of production as well as hard as you can and that was the main way to skin the cat plenty of wool per hectare at low cost. Well interestingly what I'm presenting here is from a data set in Western Australia where they've got 80 farms that are 70% stock and that's merino self-replacing operations and 30% crop and they just did a 5 or 6 year analysis for us and all of their benchmarking reports in the past have had the same conclusions as their fellow benchmarkers. This one was different. Yeah, 5 to 7% higher stocking rate was associated with these farms that were making more money in the long run because one of the things I'm not a fan of is benchmarking is one year analysis because what they'll all say is that their different farms jump in and out I heard it yesterday. This one is resilient farming businesses that make good money over the course of time and that's what we're focusing on in this study. They had 5 to 7% higher stocking rate but for the first time ever they had 10% higher landmarking percentages coupling together to a 15 to 20% higher land production per hectare and remember this is in a merino business and a 10% higher sale price for their sheep. All of that accumulated together that 80% of the difference between the high profit farms and the rest was tied up in the total of that which we call livestock trading profit. So the game's changed. It's evolved a bit and it's evolved because of some of the levers that we've alluded to already in our presentations. So if you're going to hit these targets what hasn't changed is you've got to grow grass and you've got to utilise that grass. That's the starting point and that is key. But you wrap around that the scanning percentage and all that is is given that in the past we'd only be worried on this what we cut and the cost of production. But now there's many merino enterprises that are getting as much or more income from meat as they are at a wool. So that backdrop made sense when they got 80% of their income out of wool 20% out of meat. Today that's a different story. So her scanning percentage is like her potential and we've all got plenty of potential but we don't all deliver on that. Delivering on that is all about lamb survival and that's the conversion of that potential into reality. Then how quick those lambs grow to market accumulates up to these sorts of KPIs we're talking about. And the program that we as an industry and as individuals have invested a lot in in fact it would be close to $10 million with the combination of the research and the investment that there is today from AWI to assist producers nationally to do this course has led to about 3,300 this is last night's data 3,300 farmers that now is over 20% of the national flock has been influenced lifting stocking rates by 10% marking rates by 10% while reducing you mortality by 30 to 40%. Now those same benchmarking reports I read for years said that these two things are antagonistic to each other. You cannot have your cake and eat it as well. You can't drive stocking rate and reproduction simultaneously. There's many farms that are doing that they may be growing peered or say well they're doing that because they were stocked below their productive potential to start with well that may be true. A history of our flock in the background many numbers were eroded and that's part of the backdrop but many flocks need to build and rebuild internally which even increases the value of that extra land even more. So things have evolved and the benefit cost as an industry on this is quite handsome when we even include the research phase so this is all value at the industry level but I'm going to talk specifically in a minute about a farm case study that shows you what value it can be at the farm level. And that relates to the rest of the presentation is all about these farms that have made these gains it just hasn't happened by defined intervention like if Jason's going to lose 20 kilos he's got to have a go yeah so it's exactly the same with these producers and we understand their practices and their behaviours and attitudes in quite a bit of detail and pre-lifetime U is the percentage of farmers adopting those practices as part of their normal management and this is post-lifetime U management and stemming out of that comes a little saying use that thrive do the five a bit like Lowery Lawrence you know kids of life do the five so what you'll see in the backdrop is things like condition scoring which is basically just like the fuel gauge on your vehicle if you've driven to Canberra which Booth has 3% of farmers basically ain't going to check that gauge between now and when he drives back to Lockhart they just keep on driving whether the vehicle's teeter and empty or not they just keep on driving and that there is not in line with driving total productivity out of this animal and I'll come back to that in a minute along with a whole range of other set of skills so let's roll through these five and I'm going to talk again sort of at an industry and a farmer level and just last night I was encouraged to start off with this measure to manage I was talking to a well educated man that's on a number of different boards in our industry and other industries and he said you know the difference between these sheep farmers he said they just don't measure to manage I'll speak to a cropper and he'll tell me bang bang bang the situation the sheep farmer says oh yeah the sheep don't look too bad there's plenty of feed and it's very aloof not nearly as precise enough and some of that precision needs to come in around these sorts of practices condition scoring, scanning for multiples and feed allocation and just to give you some stats at a whole industry level about 25% of producers nationally scan for multiples and less than 20% scan for multiples and reallocate feed because remember we've got a limited amount of resources on these commercial farms and one thing this is not is not a fat you project where you are over supplementing the you to increase lambs and therefore the margins that you're making are basically eroded because you've gone about it in an inefficient manner this has to be about understanding what she requires and using your resources to great effect and I'll show you that in the case study in a moment and because very few farmers are scanning and reallocating this is the current conundrum this is why I'm excited, yeah we've got an industry that's growing and our stocks are rising I'm saying to you we haven't even started yet because for every 100 marino use they scan on average 120 fetuses okay that's 120 pregnancies or fetuses per 100 years joined 120% and as we've seen we mark about 80% of lambs so for every 100 years the wastage is about 40 lambs or if you do it as a percentage 33% and the majority 90% of that loss is in the first 48 hours of life and herein lies the challenge because absolutely no wonder in the past has all the lots of benchmarking reports concluded that landmarking percentage is not linked to farm profit and this slide describes exactly why because industry average twin lamb survival is sitting at around 50% and if you're going to increase scanning percentage by feeding more dropping stocking rate putting in loose end buying more fertile sheep there's a cost attached to every one of those strategies you've driven in cost you've driven up this one but you're inefficient conversion of that into farm profit when you're only getting 50% twin lamb survival because as you lift scanning you push more into that more vulnerable category ironically what's happened in this western Australian data set is those 80 farms have been through lifetime year management what do you know lots of them are scanning reallocating feed lifting their twin survival into the order of 70% what bubbles to the top five years later is the drivers of profit are slightly different to what our gross analysis was telling us because if you've got a set of farmers that have all got this level of twin lamb survival no wonder it's going to conclude that reproduction isn't associated because they're all skinning the cat in a very inefficient manner so you've got to be careful about what's concluded out of the data and this fedwell area is where it gets really interesting it's about really understanding the use requirement and doing our level best with our limited resources to manage this in a productive and proactive manner because from mid pregnancy on these animals are in different categories twin singles and dry and I don't have time today to go into that into full detail but let's just say that this 50% increase in requirement or doubling in requirement sorry here in this twin bearing you is not great for whole farm feed efficiency when she eats a head off in this phase and then if you've mismanaged or mismanaged the lambing paddock which we have Amy here is focusing on the impact of lambing density on survival with her awards she got last night this is not good for whole farm feed efficiency they're eating the heads off you grow 10% less wall and she's fed the pregnancy and you got no lamb to show for it if it dies in the first 48 hours of life and a wall by the way is more likely to be tender so the inefficiencies are quite huge and if you don't reallocate feed this is the picture you're going to get we have the evidence to show what will happen with the causes around lamb mortality and the majority of those lambs will die due to a lack in nutrition to the mother and then ultimately to the lamb and that's both in pregnancy and lactation and on the same farms that were in this data set the next biggest cause of lamb loss is dystopia typically due to excess nutrition what's the answer to this it's scanning reallocating feed so you're Rob Peter to pay Paul and you lift the net survivals in both categories often at no extra feed costs just at the cost of scanning and a bit of labor to reallocate those use accordingly which will add up to about a dollar a sheet okay that's the first heckling I've got this is the case study you're going to be pretty interested in 5000 use it's based on and basically this is a real farm that scanned this number of fetuses there's their scanning percentage so half of the use scan single 40 odd percent scan twin so for every 100 years that lamb there was 80 twin lambs dropped and 50 single lambs dropped 133 percent potential the outcome is what's written there they mark 90 percent of lambs on the surface many would say you're marking 90 percent of lambs in a self replacing marino flock don't pursue marking anymore because if you mark anymore you should be running extra stock to drive all cut per hectare well that's interesting because they mark four and a half thousand lambs they lost 2100 lambs and nearly lost 500 used to boot with that mindset of not scanning and reallocating feed they did scan but they didn't reallocate feed accordingly so we knew their potential across a lot of years and this is what they need to exploit the principles of this work out of lifetime new management where we reallocate feed away from the single to the twin because her lamb survival is much more responsive to her body condition at the point of lambing what's exciting is the outcomes of this case study when you apply best practice which by the way in the same region with the same genetics there was tens of thousands of other years that had the same starting point that delivered in the same season a completely different outcome and that summarised their current performance which I've just described versus best practice and achieving best practice required about 15 kilos of grain extra feeding ironically this farm, these couple of farms in this data set were feeding a very similar volume but their strategy was we won't feed, won't feed and they got to the stage of lambing ewes were starting to die due to pregnancy toxemia or energy deficit and they end up feeding a similar volume but when you feed a kilo of grain to maintain or control weight loss on a ew it's three times more efficient than letting her lose weight and then panic feeding to feed that back on so it's the efficiency with which you do it and anyway taking into account that feed costs and the interesting thing is today when you grow for every half a condition score you grow half a kilo extra wool with no price penalty because there's not that micron premium we profited about $20 a year which if your time is all that out with the extra sheep sails through the extra lambs the extra ewes you kept alive the extra wool from the ewes and from the lambs and taking into account the feeding costs it was $20 profit per year so we'll get the ew up to go around for the next reproduction cycle much more handsomely so there's carryover effects so I think that's really exciting and it's a big part of driving total productivity it pays at the farm level and there's really good returns at the industry level to help support and educate farmers to do this but we must have adaptable systems and I'll move quick to finish off but this is why I love this statement about return to normal seasons this is 30 years of pasture data and one year they have 10 ton of feed and two years before they grow 5 ton of feed how is your system set up to cope with that sort of volatility in feed supply and that's a thing we build a workshop it's called more lambs more often because it turns out reproductive efficiency and how you're managing that is a big part of a farm's resilience to be able to cope with a down-selling flock numbers and then rebound quite quick as well as dealing with the inefficiencies that we're very passionate about as well because in those tight years every feed resource is precious just moving on bread well so we've talked about measure to manage feeding you well having adaptable systems but a big foundation of this is breeding the right sheep and the keys to that is having a clear breeding objective and here's an output of a couple of thousand marino farmers and what they're focusing on which I don't have time to dwell on at the moment it's very subjective to get on board this genetic express you must use the best of the visual and objective tools I'm not very interested in the debate in the industry where we've got two sets of asses backed into different corners of the room one saying it's all visual one saying it's all objective measurement it's about bringing those two together to get a productive outcome and finally we must be focused on breeding a balanced high performing sheep that converts these limited feed resources efficiently into these two great products and that does not necessarily mean selecting for maximum growth or maximum will cut because you might find that that changes the balance of the sheep which changes their ability to efficiently convert limited feed resources into those two great products and you could exacerbate things like you mortality weiner mortality lamb loss if you're not breeding a balanced sheep you can work and no wonder Amy's working on the lamb environment because there's a whole series of factors that are critical and this nursery environment where we must provide adequate feed and water, shelter, privacy, freedom from predators, minimal disturbance sounds like the National Convention Centre and we're lambing them indoors we're not doing that but we're exploiting a set of principles that set that you up to give her every chance of converting that potential and that feed resource into a live lamb that we can either sell or retain in our flock and I was part of some survey preliminary survey work looking at the impact of mob size and stocking rate on lamb survival and these are single and twin, the dotted line of twin bearers and we did it for different U-types and it appears as though there's a real and significant effect but we want to understand that more and that's what Amy won an award for last night. So for years to thrive we must do the five it's got to be a complete package and a big part of that is driving the feed base and the pasture system but becoming a lot more disciplined in how we're managing this breeding U because from less we want her to produce more and do you want me to give a little insight to the future? One of the things that we've got is to help us on this quest is a little bit of technology which I thought you might enjoy that's on being on some of our sheep at home that's part of some research in the Trobe Union, Australian wool innovation are doing some work in this area as well. A big limitation to achieving this in our industry is linking lamb to dam. Even in the flocks that are in the Marino database a vast majority of them don't have full pedigree that are in Marino select and but what we can start to do is get a whole lot more commercial validation and understand a lot more about behaviours in the paddock we can measure well-being remotely we can select passengers and performers, drive productivity to a new level with these sorts of technologies and it's using what we call smart tags or smart sensors and if I click you'll notice the behaviour here relates to the output here relates to the U and then a lamb is going to run into the screen and here's his output and it picks up really distinct movements like suckling and that sort of thing so we'll just let it roll and hopefully you can see how this can help with our quest. They're out of sync a bit, unfortunately. Are they? No, they're all right. Here we go. So there's the movement in the lamb. So what this technology gives us the ability to do is through proximity is tell you which lamb is spending most time with which you but in addition compared to the existing technology of Pedigree Mixmaster we can not only say that they're spending time together but we get the perfect lock by that signature movement of the lamb suckling and you'll see here in a minute this is the U just does a big shutter and the lamb's done nothing. So when an animal's done that and you're paddock for a day or so and hasn't moved that might be a cure that we need some intervention. So thank you very much.