A looming El Nino has sheep producers worried.
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An industry survey has found half of producers are increasingly worried about the prospect of a dry season in both sheepmeat and wool industries.
The other big fall in producer sentiment uncovered by Meat and Livestock Australia was the ongoing threat to sheep live export in Western Australia.
Almost 2000 producers from across Australia took part in the regular MLA survey.
Half of those farmers stated the weather was their number one concern impacting on-farm decision making.
The Bureau of Meteorology this week upgraded its El Nino prediction from "watch" to "alert", meaning the drying weather pattern is now more likely than not.
The MLA's survey found overall producer sentiment was positive, but has dropped significantly in Western Australia due to concerns around the future of sheep live export.
Merino continues to be the dominant breed for breeding ewes and wethers at 64 per cent and 87pc respectively. First cross breeding ewes make up 14pc of total numbers.
Producers recorded a three-way split on stock intentions, with about a third each saying they would increase, maintain, or decrease breeding ewe numbers in the next year.
Concerns around the weather and seasonal conditions are impacting producers from right around the country.
READ MORE: Sheep market loses confidence
Half said the weather was the number one issue affecting their on-farm decision making while 31pc cite weather as their main off-farm external factor when it comes to running their business.
According to the metric applied by the survey, sentiment on the sheepmeat industry fell from 68 points in October 2022 to 27 in May 2023, a fall of 40 points.
While most states remain positive, WA sentiment has dropped to -48 sentiment points.
MLA's market information analyst Jenny Lim said while sentiment from producers declined in all states, WA producers' overall sentiment declined by 90 points between October 2022 and May 2023.
"WA producers are noting that they have extra sheep on-farm, with processors working through a significant backlog and an oversupply of lambs," Ms Lim said.
This survey focussed on understanding the profile of Australia's breeding ewes and wether flocks.
Of the estimated 46 million breeding ewes on hand, Merinos made up 64pc of total breeding ewe flock, while first cross sheep represented 14pc and prime lambs represented 12pc.
Producers in New South Wales, South Australia, Queensland and WA also have a larger proportion of Merinos, with Tasmania and Victoria reporting lower proportions.
Regarding producer intentions, there was a mixed response around their breeding ewes flock in the next year.
The growth position was stronger among producers in Queensland, but that state represents a small proportion of the overall national flock.
WA producers were more likely to forecast a decrease over the next year.
The latest "Sheep Producer Intentions Survey" was issued by MLA and Australian Wool Innovation.
Almost 2000 producers from across Australia took part in the regular MLA survey where the results were then weighted using the latest available Australian Bureau of Statistics data to produce industry estimates.