Australian Wool Industry & Why Queensland Is ‘Built on a Sheep’s Back’

Australia is one of the largest producers of wool in the world. We produce around 25 percent of greasy wool sold on the market. The value of our 2016-2017 wool exports was $3.615 billion. Considering Australia’s wool is recognised among the world’s best, these figures reflect the strong global demand for our wool. 

Wool production takes place in Australia across all states excluding the Northern Territory. New South Wales produces the largest volume of wool, followed by Victoria, Western Australia and South Australia. While the state of Queensland is no longer among Australia’s highest wool producers, at one time, Longreach was known as the ‘Wool Capital of the World’ and ‘Centre of the Golden Fleece’. 

Queensland, and Australia as a nation, has frequently been said to be ‘Built on a Sheep’s Back’, due to the significant economic benefits brought about by our wool industry. In this blog, we look back on the rich history of Australia’s wool industry, and unpack how our nation was ‘Built on a Sheep’s Back’. 

Sheep in Australia

Sheep first arrived in Australia with the First Fleet in 1788. Governor Phillip brought a small flock of Merino sheep from the Cape of Good Hope in South Africa. These sheep were purchased en route to Australia as food supplies. Although, with the arrival of new settlers and the opening up of expansive tracts of land, sheep quickly became a valuable commodity. 

Beginnings of the Australian Wool Industry

When early European settlers brought sheep into Australia, they were reared primarily for meat. Australia’s wool industry started in 1796, when John Macarthur in New South Wales bought his first merino sheep from a flock of Spanish merino sheep reared in South Africa. Soon, Macarthur and the Reverend Samuel Marsden started selective breeding. With selective breeding of Merino sheep and other stock breeds, sheep were crossbred to suit Australian conditions. 

Governor George King was the first to identify the market potential of establishing a textile mill in Parramatta. The first auction of Australian wool took place in London at Garraway’s coffee house and brought in $2.27 per kilogram. 

In 1814, anticipating the potential wool had to build the Australian economy, Reverend Samuel Marsden notably stated,

“We must have an export or the settlement will never prosper and this (wool) promises to be the first.”

Half of the total national production (30 tonnes) of wool was used by the Parramatta mill, while the balance was exported to England. During the 1820s, the grazing industry was pushed over to the Blue Mountains, destroying Aboriginal hunting grounds. 

Managing the global wool production market

Eventually, deterioration of English wool quality and import duties on German wool saw a major increase in demand from the Yorkshire mills. To manage this, the English government started the development of fine wool in Australia. A duty of only 1 penny per pound was imposed – in comparison to 5 pennies per pound for foreign wools. 

Unfortunately for the Australian wool industry, this advantage was reversed in 1825. This saw Germany’s imports into England increase dramatically, from 7 per cent to 66 per cent of their total wool imports. This abrupt increase threatened to destroy the Australian wool industry. Consequently, the Australian wool industry responded by concentrating on very fine wool. 

1840s: wool auctions & the start of Queensland’s sheep industry

Wool auctions began during the 1840s. However, the bulk was sold on the London market throughout the 19th century.

Queensland’s sheep industry was started in 1840 when pioneer and grazier Patrick Leslie and his brothers drove a flock of 1,700 rams as well as 4,000 ewes and lambs to the Darling

Downs. With Queensland’s hot and frequently dry conditions, sheep breeders in the southern colonies doubted Queensland’s potential as a high-grade wool producer. Strangely, some even speculated sheep would produce hair instead of wool. However, these speculations were quickly dispelled as pastoralists prospered from the rich grazing land throughout the western regions and established one of the most successful industries for the state.

By the mid-1860s, 25,000 sheep were transported to Bowen Downs Station. Soon enough the station was equipped with its own shearing sheds, scouring sheds and a washpool. Scouring the wool, or washing the wool in hot water and detergent, enabled the wool to achieve a better price at market. 

1870: Australia is the world’s largest wool producer

By 1870, Australia became the world’s largest producer of wool. In 1872 wool trade between Australia and Europe was well established. In 1874, Australian wool was shipped to Japan. During the following year, a wool shipment was sent to Shanghai. 

By the time of 1880, Queensland’s wool industry was booming and the Longreach district was building their reputation as being amongst the best wool growing districts in the colony of Queensland. 

Opening mills in China was considered, and a Use More Wool campaign was introduced in 1885 following intense competition from cotton. As a forerunner to the Australian Workers Union and the Australian Labor Party, a Shearers’ Union was formed in 1885. 

Shearers Unite

Naturally, shearers had grown to become an important part of the wool industry. However, they felt their wages did not fairly compensate them for the brutally hard work they put in. 

In Queensland, tensions ran high. By 1891, the unions formed by the shearers held one of the first May Day marches in the world, in Barcaldine. This had significant impacts on Australia’s political landscape – with the event setting the scene for the rise of the Australian Labour Party. 

1925: Australian wool continues to make its mark on a global scale

By 1925, Britain was the largest buyer of Australian wool, taking up 44% of our wool market. Japan and the United States each bought around 10%. Other major markets for Australian wool includes France, Germany, Italy and Belgium.  

In 1931, Australia, New Zealand and South Africa came together to fund an international promotion. It took a long five years for all countries to agree to the funding, based on a tax of 6 pennies a bale. 

1936 saw the formation of the International Wool Secretariat (IWS). This organisation was created to represent wool growers in the main exporting countries. Members included Australia, New Zealand, South Africa and later Uruguay. 

In 1974, a price floor was established for wool prices under a Reserve Price Scheme (RPS). However, this price floor collapsed in 1991. Since the collapse of the reserve price scheme, the wool industry has shrunk to a third of the size that it used to be.

Looking back

For a century, Australia’s prosperous wool industry afforded us one of the highest living standards in the world. Our economy was thriving off our primary exports of wool. By the time the 1950s rolled around, ‘wool’ was synonymous with the Australian way of life. However, by the 1990s, the gap between city and country folk was increasing. 

Australia’s Wool Industry Today

Today, wool remains one of Australia’s most important exports; our wool industry is worth $3 billion. On average, our wool farms are 3,100ha with 3000 sheep. Our sheep population is incredibly high – at 73 million sheep in Australia with 50,000 wool growers. Impressively, 90% of the world’s fine wool for clothing is from Australia. Looking at our exports today, a whopping 80% of Australia’s wool is exported to China.

It’s safe to say our sheep farmers work tirelessly, providing our country with competitive wool exports and boosting our economy. At Global Rotomoulding, we understand the tools and equipment needed to effectively manage an agricultural lifestyle and business. We stock a huge range of products servicing the agricultural industry, from troughs and feeders to fertiliser tanks. If you have any questions about our range and how it can benefit you, chat with our friendly team for more information. 

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