Merino enterprises profitable & competitive compared to others
30 Mar '06
2 min read
Australian Wool Innovation Limited (AWI) announces that the Merino wool producers have every reason to be positive, according to Western District farm business consultant Dr Graham Lean.
Speaking to producers at Australian Wool Innovation (AWI) 'Pathways to Profit' forum in Hamilton, Victoria, Dr Lean said that wool enterprises had been competitive with most farm enterprises in the past five years despite low prices.
"Actual farm data demonstrates that Merino enterprises are profitable and competitive with other competing enterprises, even over the past two years of very low wool prices and high meat prices, wool performed," Dr Lean said.
More importantly, a benchmarking analysis of more than 50 local farms over the past five years, clearly rammed home the age-old message that it is not what you run that determines profitability but how well it is run.
"That is, management is more important than enterprise choice in determining profitability," Dr Lean said.
"The top 20 per cent of wool enterprises are more profitable than the average prime lamb flock in the high rainfall zone, where it is said by some that Merinos can't be run."
Dr Lean said the analysis confirmed the key profit drivers for Merino wool enterprises were stocking rate, fleece value per head, wool cut per hectare and time of lambing.
"Increasing stocking rate means running stock smarter, not harder, by improving pastures through new better quality cultivars," he said.
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