Cost of production (COP) is a key factor affecting the profitability of wool producing businesses. COP, measured in dollars per kilogram clean wool, is an indication of the outlay required to produce each kg of wool.

It is therefore a measure of the efficiency with which you produce wool. Calculating your cost of production is an important step in assessing flock profitability and a first step to making change.

Key benefits

• Learn to use the AWI cost of production calculator to measure the performance of your wool enterprise year on year.
• Compare the efficiency of your enterprise annually with other wool producers and find out if there is scope for improvement, or if your enterprise is already performing well.
• Use the cost of production information to help with wool marketing decisions.

Calculating your Cost of Production

The first step in calculating your COP is to read the background material (PDF 111Kb) which includes calculator instructions, information about how your COP compares with others and helpful tips!

You can use the calculator in Excel (automatic calculation) or PDF (manual calculation) formats:

• The AWI wool Cost of Production calculator (.xls - an automatic excel spreadsheet for easy calculation), or
• The AWI wool Cost of Production calculator (PDF 124Kb - a manual calculation tool)

How does your Wool COP compare with others?

The most efficient one third of fine wool enterprises produce wool for between $5 and $7/kg clean. The middle group produce wool for between $7 and $9/kg clean, and the least efficient one third of farms produced wool for between $9 and $17/kg clean.

The most efficient one third of medium to strong wool enterprises produce wool for between $3.50 and $6/kg clean. The middle group produce wool for between $6 and $7.50/kg clean, and the least efficient one third of farms produced wool for between $7.50 and $12.50/kg clean.

Use Woolcheque to price your wool.