What is the optimum wool-meat enterprise mix?

Abstract

The GrassGro ™ model was used to simulate profitability of 14 sheep enterprises at four locations in south-eastern Australia. The simulated enterprises were: Merino wethers (superfine and fine wool); self-replacing Merino ewes (fine and medium wool); dual-purpose Merino ewes (fine and medium wool) joined to terminal sires; prime lamb first-cross ewes joined to terminal sires. A sheep model was also used to compare a self-replacing Merino enterprise with dual-purpose and prime lamb enterprises. GrassGro simulations highlighted that the fine-wool dual-purpose enterprise was the most profitable, followed by the prime lamb, self-replacing Merino and Merino wether systems. From 1999–2003, when a large premium existed for superfine-wool, Merino yearlings with superfine wool were as profitable as the fine-wool dual-purpose enterprise. The sheep model analysis showed that Merino yearlings had slightly greater gross margins than other enterprises when mean wool and meat prices for 1994–2004 were used, but not when prices for meat were high in relation to those of wool (June 2003-May 2004). In the sheep model comparisons, spring lambing resulted in greater gross margins than winter lambing and production of yearlings was more profitable than production of weaners. The dual purpose Merino meat–wool enterprise is resilient against changes in commodity prices, but the genetic merit (wool production, fibre diameter and liveweight) of ewes purchased or bred should be considered. A prime lamb enterprise, using first-cross ewes, will not necessarily be more profitable than systems using a Merino ewe base, particularly when prices for first-cross ewes are high or when weaning percentages are low.