Sheep producers are questioning the traditional assumptions about the most profitable enterprises to run in the future.

This is driven by changes in the price relativities of wool, lamb and mutton, price volatility, production risk, predicted future prices and reported productivity gains from alternative enterprises.

NSW Department of Primary Industries analysis of seven sheep enterprises in four different markets concludes "no enterprise...is a standout under the more recent wool/ meat price relativities".

It might be equally surprising to learn that some enterprises based on Merino ewes are indeed competitive.

The enterprises evaluated were Fine Merino, Merino, Merino Ewe/Terminal Sire - sell all progeny, Meat Merino - Improved carcass and reproduction, Dohne, SAMM and First Cross Ewe/Terminal Sire.

Given that medium term predictions for sheepmeat look cautiously optimistic, then maintaining a Merino ewe and joining surplus ewes to terminal sires looks the best each way bet.

Current prices are low to medium for wool and high to medium for meat; the 10 year average moves the other way.

When tending towards lamb production, it should be remembered that finishing lambs to 46 kilograms from a spring joining increases the seasonal risk and profit variability; the extra labour required to finish these lambs also needs to be further analysed by individual farm businesses.

The not inconsiderable cost of changing enterprises needs consideration.

A key assumption in this analysis is that the flock currently is being run at close to its optimum stocking rate (15 dry sheep equivalent per hectare).

This analysis has been done using one location, Bookham, on the South West Slopes on an annual grass and legume pasture.

The relative results will hold for others areas in southern NSW but there must be some doubt about transferring these results to western or northern areas.

The analysis was tested in Young’s climate and the relative performance did not change.

This modelling exercise was undertaken with Grass-Gro, the advantage being that it includes the impact of weather over a longer time frame compared to analysis based on gross margins.

The final decision on enterprise selection involves a number of factors; this work provides some of the information required.

The full paper is available in proceedings from the QPLU$ field day held at Trangie early this month, available from Cheryl Pope at Orange Agricultural Institute.

Contact Cheryl Pope, Orange, 02 6391 3948.