Merino flocks are delivering healthy and relatively safe returns compared to other enterprises.

This year’s Industry and Investment NSW analysis, based on figures from south east NSW report a self-replacing Merino ewe (21 micron) mated for prime lamb operation returns a gross margin per hectare of $309.57, Merino ewes (19 micron) mated for Merino lambs at $283 GM/ha, and Merino wethers (19 microns) $233 GM/ha compared with cattle yearling production at $170.60 and wheat production (ASW/APH/AH) at $115GM/ha (assuming a 2.5 t/ha yield and on farm price of $181/t). 

Meanwhile Victorian-based consultant Mike Stephens agrees that having livestock in any system makes financial sense, with the most profitable livestock operations currently running sheep and the self-replacing dual-purpose nature of the Merino makes it a very good option.

“Our experience shows that once a farming operation has over 70% crop it becomes financially very risky so we certainly advocate balancing any cropping operation with livestock. The dual-purpose and self-replacing nature of the Merino ewe makes her a very good choice. This is something that could be placed in front of younger farmers,” Mr Stephens added

The figure of a Merino gross margin of $300/ha is standard fare for NSW livestock consultant Craig Wilson who runs Australia’s largest Merino bloodline comparison.

“Our work with the Taralga trial in the Southern Highlands has shown just what is possible when feed is plentiful and stocking rates are pushed, with an average gross margin of $497/ha, but it was the 77% variation in net profit per hectare that shocked me.” 

While Craig is not against cropping per se, he agrees that having a Merino ewe operation in any mixed enterprise is critical to have a control of production and of risk. Those either moving into Merinos for the first time or wanting to boost their efficiency will find valuable advice to increase their profits within “Making More from Merinos”, produced by AWI.