Wool and meat profits can be much closer than the accepted view
From the August 2011 edition of Agriculture Today.
Wool meat comparison
- View the wool meat comparison
The past six months have seen a dramatic change in the wool price, while sheep meat prices have maintained strong levels.
GrassGro modelling has analysed changes to the relative profits of four sheep enterprises at three locations representative of the southern regions of NSW – Yass, Cootamundra and Lockhart.
“In the recent past, there has been a perception that meat lamb enterprises have been substantially more profitable than wool, however the modelling suggests otherwise,” said grazing systems technical specialist, Phil Graham.
“Their performances are most likely closer to each other than the accepted view across the industry and this new information enables producers to make decisions based on reality, not perception.”
Local weather conditions placed varying pressures on enterprise performances, and profitability (assessed on a per hectare basis) changed according to how well the enterprises matched their pasture supplies.
“While this influence of locality might have been reasonably expected to play a part, we found it played a role that previously hadn’t been analysed,” Mr Graham said.
The enterprises were second cross lamb (PL), Merinos joined to terminal sires (MT), and self-rep-lacing 18-micron and 20-micron Merinos, (M18 and M20), listed in the graph.
Market prices and costs were analysed in four time periods: a five year average from 2005-09, 2009 only, 2010 only, and the year July 2010-June 2011.
The modelling ran records from the actual weather conditions that occurred during the period 1960 to 2010, for each enterprise.
Mr Graham said the stocking rate was set so sheep in each enterprise ate the same amount of feed.
“It meant we compared the enterprises on equal pressure applied to each property without breaking accepted ground cover guidelines,” he said.
“The weight of ewes, lambing percentages and turn off time all influenced the stocking rate used.
“This provided robust data about performances across a range of years at the three locations.”
At each location the lambing time varied to suit the area.
At Yass, Merinos joined to terminal sires performed best in three of the time periods but gave way in 2011 to self-replacing 18 micron Merinos.
For ease of analysis, Cootamundra and Lockhart were assessed for 2011 only.
Self-replacing 18-micron Merinos were most profitable at Cootamundra.
At Lockhart, Merinos joined to terminal sires had the edge, but at both locations the differences were small across all enterprises.
Wool enterprises have improved their relative position due to price improvements and because they breed their own replacements.
Email Phil Graham for details on the assumptions used at email@example.com