All wool may beat poor ewes and lambs

Press, 2 August 1985, Page 19

All wool may beat poor ewes and lambs

As part of its advice to sheep fanners on how to combat the coming sheepmeats price shock, the M.A.F. office in Rangiora has analysed possible returns from running dry sheep for wool production. “Several. opportunities exist,” said Mr Robin Kent, a farm advisory officer, such as running Merino, Drysdale or Romney wethers or alternatively dry ewes. “We have looked at two of these possibilities, namely Merino and Drysdale wethers bought as wether lambs, farmed for five years and sold for their meat value at. the end of that time.” The analysis showed that dry sheep were favourable comparable in returns from a hectare with lower-per-forming ewes farmed for lambs and wool. They also presented some management advantages. With Merino wethers the choice of stock is important because of the wide variation that exists with wool quality (fineness, yield and colour) and weight, which all relate to the prices obtained for the wool. Mr Kent observed a balancing factor, high quality wool tends to have a

lower weight and lower quality wool tends to have a higher weight. “In general sheep bred in the high country and moved down to lower country tend to produce coarser wool,” he said. He assumed that 14 Merino wethers could be run on a hectare that normally supported 10 stock units in ewes and replacements. “Obviously where the normal stocking rate is less, then the number of Merinos will be less, but the same ratio tends to apply. “An average situation would be Merino wethers producing skg of about 22 or 23 micron wool realising say $5.15 a kg net at auction. “For 14 a hectare the gross margin would be $167.16. “Incorporated in these calculations is servicing of increased capital associated with the higher cost of buying in higher priced stock and increased numbers of wethers compared with ew.es.” Mr Kent calculated that the gross return for 1000 wethers, with a 3 per cent death rate, would be $27,200 annually. The return came from an average skg of wool per head and the sale of 200 old wethers at $lO a head net.

His costs were 230 replacement wether lambs at $35 ($8050); shearing and flock expenses at $1.30 a head ($1267); crutching at 35c a head ($341); drenching three times at 15c a head ($450); eartags, footrot and other animal health ($900); Sing at 30c a head ($300); cartage for replacement stock at $3 for 230 head ($690) and for wool, 4900 kg at 10c a kg ($490), giving a total in direct costs of $12,488. The gross margin was $14,747, or $14.75 a sheep. But Mr Kent reduced the actual gross margin of each sheep to $11.94 because of the increased capital servicing requirement when running more wethers than ewes and replacements. For comparison he said gross margins for 10 stock units a hectare in ewes and replacements were: • At 4kg wool and 120 per cent lambing (all exports), $23.51 each or $235.15. • At 4.5 kg wool and 100 per cent lambing (25 per cent sold stores), $22.23 each of $222.37. • At 3.5 kg wool and 80 per cent lambing (25 per cent stores), $16.73 each or $167.32. Mr Kent said the positive aspects of running Merino wethers for wool were

lower labour units and therefore possible release for other work, no need to maintain summer liveweights in breeding ewes and a feed surplus in late spring and possibly late autumn. This could be used to finish store stock, perhaps 150 fattened for 1400 wethers run. The negative aspects he identified as a wide variation in wool quality and weight, higher capital input and servicing needs, possible problems in selling large numbers of aged wethers and greatly increased risk of footrot and perhaps pizzle rot. “Drysdale wethers run for wool production tend to be less variable in returns,” he said. “It is suggested that 6 kg of wool each sheep is feasible with twice a year shearing and a relatively stable return of $4.20 a kg.” The equivalent stocking rate was assumed to be 13 to a hectare because of the slightly higher Drysdale liveweight compared with Merinos. The gross margin was calculated by Mr Kent to be $191.23 a hectare after allowing for a slight extra capital servicing. Compared with Merinos, the Drysdale replacements were cheaper (at $22); the

shearing expenses were dearer ($2 annually) and the wool cartage costs dearer (at 15c a kg). Total direct costs were $10,323 and the

gross margin per sheep was $15.57. Taking into account the servicing on the capital differential between ewes and their replacements and

the wethers reduced the margin per sheep to $14.71. In addition to the positive aspects they have in common with Merinos, Drysdale wethers are more resistant to footrot, have a more stable return and require less initial capital. “On the negative side, they require twice a year shearing to achieve maxi-

mum wool performance and possibly a higher standard of fencing. “While all estimates given are subject to variation, the viability of wethers for wool production is fully comparable with lower-performing ewes for lamb and wool production, with some management advantages,” Mr Kent concluded.

Sensitivity to Merino wool weights and prices (Gross margins running 14 wethers/ha)

Price 2.5kg Wool weight in kg/head 5.5kg 3.0kg 3.5kg 4.0kg 4.5kg 5.0kg 1200c $216.72 $295.96 $375.34 $454.44 $533.96 $610.26 $692.30 800c 79.52 131.46 183.12 235.06 287.00 338.66 390.46 650c 28.14 69.72 111.16 152.74 194.46 235.76 277.20 500c — 7.84 39.06 70.42 101.78 132.86 164.08