Merino sheep & wool enterprises resilient to drought
23 Nov '06
2 min read
A study commissioned by Australian Wool Innovation (AWI) has confirmed that Merino sheep and wool enterprises are some of the most resilient farming enterprises during drought.
The study, conducted by Holmes Sackett and Associates, looked at data for major broadacre and livestock enterprises during normal and drought years in southern Australia; supplementing previous reports on this topic.
While gross margins for broadacre crops and beef production enterprises dropped significantly during drought, wool enterprises weren't as vulnerable, generally maintaining their gross margins.
Author of the report, David Sackett from Holmes Sackett and Associates, said this is because wool enterprises don't rely as heavily on weight gain or yield as do beef cattle and cropping enterprises, respectively.
“Though wool is affected by the drought, it is not nearly as vulnerable as other enterprises, because half to two thirds of the income in a merino flock comes form the wool component,” said Mr Sackett.
“Under maintenance feeding levels in a drought, fleece value is often maintained or only slightly affected, unlike the production from most other enterprises. Increases in grain prices during a drought are not sufficient to compensate for the reduction in crop yield.”
Ian Rogan, AWI General Manager Wool Production said these results are consistent with previous reports.
“While the results certainly don't indicate that anyonewho runs a Merino sheep and wool enterprise isn't going to be affected by the drought, it shows they're better placed than many to deal with the problems associated with prolonged dry conditions.
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