The implications to growers of moving to merino fine wool production in intensive production systems

Abstract

A review of both Australian and New Zealand literature was undertaken to identify the management factors requiring consideration when running Merino stock under intensive production systems. Emphasis was placed on determining: - the effects of varying levels of nutrition on fine wool characteristics and reproductive performances; - areas where animal health programmes may differ between Crossbred and Merino flocks; - factors which are likely affect the profitability of running Merino stock classes under intensive conditions. Under a stated set of production parameters it was estimated that a Merino ewe and Merino wether are equivalent to 0.83 and 0.47 stock units respectively. Therefore allowing them to be exchanged for Crossbred ewes within a productive system for 1.2 and 2.1 Merino wethers respectively. Merino stock class production performances were gained from an informal farmer survey, these along with Farm Class Six stock parameters and current price estimates, were used to develop a financial analysis determining the profitably of diversifying from an intensively run Crossbred ewe flock to an equivalent Merino ewe or Merino wether flock (replacements purchased annually). Both fine wool scenarios were determined to be more profitable than the Crossbred policy, although the highest return will be realised with the adoption of the Merino ewe policy. The annual return above that of a Crossbred ewe self replacing flock was estimated to be $ 29.78/s.u and $ 19.9l/s.u for the Merino ewe (self replacing flock) and Merino wether (replacements purchased annually) policies respectively. Other factors besides profitability, in favour of the Merino ewe policy over the Merino wether policy include: - better fit between feed demand and pasture supply; - flexibility of prime lamb production when terminal sires are used; - income is not solely reliant upon fine wool prices; - ability to increase the genetic worth of the flock. Sensitivity analyses were developed for the price and production parameters identified as having the largest influence on the profitability of diversifying from a Crossbred flock to an equivalent (1000 s.u) Merino flock. It was determined that it will remain profitable for for Crossbred farmers to diversify into a fine wool producing flock if: - clean wool price ratios do not fall to or below 1.06 for the Merino ewe policy and 10.9 for the Merino wether policy, Ceterus paribus; - Merino ewe purchase prices do not exceed $242/s.u. or $ 20l/s.u. for the Merino wether policy Ceterus paribus; - Merino wool production does not fall below 1.85 kg/s.u. or 5.07 kg/s.u for the Merino wether policy Ceterus paribus; - Crossbred lamb prices do not rise to or above $74 for the Merino ewe scenarios and $59 for the Merino wether policy Ceterus paribus. Given that the assumed production and price estimates are realised.