China tour instills confidence in sheep

Mr Smith, who co-runs Glenville Merino stud at Cowell, was one of 22 Australian farmers invited by the bank to tour China and Singapore.

"I had only been overseas once before so I was very grateful for the opportunity," he said.

The trip aimed to give attendees and understanding of the challenges and opportunities ahead for one of Australia's most iconic commodities.

Mr Smith said they visited Sino sheep stud in Inner Mongolia, where they were trying to produce a sheep with 200 per cent lambing percentages.

"They were crossing Suffolks and Dorpers with a Mongolian-based ewe," he said.

"They were really focusing on meat production, particularly since the swine flu outbreak.

"The Chinese normally eat 70pc pork as their protein base, so the outbreak has really increased demand for other meats there."

The delegation also toured a mill near Shanghai, where Australian wool was processed.

"One of their marketing team said the demand for wool in China was steadily increasing and it wouldn't be long before demand outstripped Australian supply," Mr Smith said.

"Particularly with our ongoing drought."

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Mr Smith said everywhere they went, commodities from Australia were considered premium products.

"We don't realise how good we have got it until you go to a place like China, where there is a lot of pollution and a lack of traceability," he said.

"They will pay big for our clean, green image."

A quick trip to Singapore on the way back to Australia highlighted this premium, where the delegation saw Australian lamb in a butcher shop selling up to $92 a kilogram.

Mr Smith said they also heard from Australian Wool Innovation, which highlighted new products such as wool denim, embossed wool, aromatherapy wool and heated 'Smart Wear'.

"They also talked about stretching 19.5-micron fabric into 17.5M and how they shrink it back with water to make it feel better on the skin," he said.

ANZ also talked about markets, in which Mr Smith was interested to learn that the global demand for wool was 400,000 tonnes.

"Australia supplies 150,000t and China supplies 100,000t - I didn't realise China had that many sheep," he said.

"They have a similar amount of sheep to us, but thankfully a lot of theirs are meat sheep as feeding their growing population is more important.

"As an Australian woolgrower, I was quite pleased they were focusing on meat."

Mr Smith said they also heard from Meat & Livestock Australia, which spoke about its push into China and increasing Australia's market share.

"The Chinese middle class are gaining more income and are becoming more westernised in their fashion and diets," he said.

"They want to eat more lamb and beef, particularly Australian products, and they want our quality wool.

"This is obviously a good target to focus on, but I am concerned about our national flock - we might not have the sheep to fill that request."

The strong Asian demand for Australian products has instilled confidence in Mr Smith to do whatever is needed to maintain his flock through these dry times.

"We are only just surviving," he said.

"We haven't had the big rains like other areas received.

"We have a bit of a green pick, but it remains very short.

"Due to the generosity of some EP farmers, we were able to source enough feed to maintain our numbers."