In the “fight for acres”, an interesting aside is the tussle for sheep based on meat and wool prices.
A situation in point is the case for Merino wethers; grow wool or turnoff into the sheep meat market?
After environmental constraints, prices play the governing role in determining enterprise mix on farms in Australia.
Given the similar change seen in sheep numbers in the major wool exporting countries in recent decades, this statement seems to also apply to sheep regions beyond Australian shores.
Prices influence on enterprise mix is complex, although the simple comparison of the carcass value of a wether to its annual wool clip value is a primary consideration.
From the early 1980s through to 2000, the annual wool value easily outperformed the carcass value.
Then for the next decade, the wool and meat values were similar.
From around 2010, the meat value has tended to outperform the wool value, in a reversal of the situation in the two decades to 2000.
The difference between the carcass value and annual wool value shown in dollars per head confirms the thinking.
In the wool value series, the greasy wool cut per head is assumed to be around 6.5 kg., for some this will be low and for others high.
Whatever greasy wool cut is used, we have seen a major change in the relative wool to meat value for Merino sheep during the past thirty years.
Such a change in relative value will lead to a change in decisions farmers make about retaining stock.
What does this mean?
This analysis will appear to be stating the obvious to many sheep producers, but it is a point not particularly well understood in the wool supply chain.
Downstream operators think the current and recent high wool price will lead to increased wool production.
Drought mixed with a high meat to wool value ratio means less sheep than historically will be carried through as wool producers and more sheep directed to the meat market.
