Self-replacing Merino operations shine in NSW

Sheep Central December 2, 2016
DPI sheep development officer Geoff Casburn talks to producers at Trangie.

DPI sheep development officer Geoff Casburn talks to producers at Trangie.

SELF-REPLACING Merino operations selling trade weight wether lambs were the top gross margin performers in the past year, according to the latest NSW Department of Primary Industries data.

DPI sheep development officer Geoff Casburn said Merino wool enterprises had the greatest growth with gross margins increasing up to $9 per dry sheep equivalent, compared with 2015 figures

“Of the 10 sheep enterprises analysed the highest gross margins were $38.45 per DSE for the 20 micron Merino self-replacing enterprise selling trade Merino wether lambs and the enterprise joining 20 micron ewes to maternal rams at $38.17 per DSE.

“Wool incomes have steadily increased in the last four years to reach levels close to, or greater than, the highs experienced in 2011 and 2012.”

The DPI data showed that all sheep breeding enterprises were performing well, with high wool and sheep meat values and demand for breeding ewes supporting strong performances across the board.

Mr Casburn said the upward trend in wool and sheep meat income has increased confidence in the industry and reduced reliance on sales of lambs and surplus ewes.

“The value of breeding ewes remained high due to the strong performance of sheep enterprises, which increased demand for sheep,” he said.

“All of which was good news for enterprises with a focus on breeding ewes for sale, such as those breeding first cross Merino ewes, and enterprises with surplus ewes to sell, yet not so good for those buying replacement ewes.

“There was a bittersweet scenario for 20 micron first cross ewe breeding enterprises – they needed to purchase 220 replacements to benefit from selling 429 first cross ewe hoggets.

“The self-replacing Dorper enterprise had good income levels, the lowest overall costs and with no wool harvest, minimal replacement of rams only and the lowest animal health costs, was a good performer.”

Higher wool values were the main reason for the large jump in performance of Merino-based enterprises.  For the 2016 year, wool made up nearly 80pc of income for wether enterprises and 53pc and 51pc for 18 and 20 micron ewes joined to Merinos.

However, lower crossbred wool values combined with higher replacement ewe costs reduced the gains in gross margins for 1st and 2nd cross lamb production where ewes are 100pc joined to terminal or maternal rams.

Changes in price and production variables saw each enterprise perform differently and weaning rate variations had the greatest impact.

A 10 percent increase in weaning rate, where there were no extra costs to lift the rate, increased the gross margin by 10pc for enterprises that bred their replacements and 14pc where replacements were purchased.

Click here for the full report and here for all the sheep gross margin budget details.

Source: DPI NSW.


Your email address will not be published. Required fields are marked *

Your comment will not appear until it has been moderated.
Contributions that contravene our Comments Policy will not be published.


Get Sheep Central's news headlines emailed to you -