THE resurgent wool market and the outlook for more gains as the China-Australia Free Trade Agreement falls into place has long-suffering Merino breeders looking to the future with some well-founded optimism.
It is with some embarrassment that I have to admit to stupidly saying a couple of years ago that wool was just a byproduct of meat and that it had almost become irrelevant in the livestock industry.
It is hard to justify that statement, but it was made when wool prices were at a very low ebb and lamb and mutton prices were flying, Merino breeders were flat-out concentrating on improving the meat traits of their sheep, and lambskin prices were outstripping fleece prices quite handsomely.
There is little doubt that Merino breeders have devoted a lot of effort to improving the meat-producing characteristics of their sheep and have succeeded to the extent that many grain farmers who traditionally buy crossbred lambs to feed on stubble, are now seriously considering Merinos as viable options.
To a lot of people, the figures speak for themselves - well-bred 2015-drop, woolly Merino lambs can be bought at $60 to $80. Compare this to the $90-$110 for comparable crossbreds and you are ahead already.
Merino lambswool is selling for 850 cents to 1000c a kilogram compared with about 600-650c/kg for crossbreds, so the shearing costs are covered, possibility with some left over to cover a bit of freight. That takes care of the buying end of the job.
It would be stating the obvious that Merino lambs simply do not sell for as much money as crossbreds, but in recent years it seems that the gap is narrowing. Twice in the past three years the top price Merino lambs the SA Livestock Exchange, Dublin, have out-priced their crossbred counterparts.
If you throw in the times that meat buyers have bought Dohne or SAMM lambs and mixed them with their crossbreds there would be more examples of Merino or Merino-influenced lambs topping market prices.
The Merino lamb fattening equation is fairly straightforward. Try to average $70 when you buy the lambs - preferably this figure is at home with the wool off and a drench applied. Simply add good quality stubble feed, provide good, clean water and watch your money grow. Of course there will always be a few hiccups along the way - flystrike will probably be as bad as it gets but Merinos are no more prone than crossbreds.
Shear the lambs again in March, sell the wool for $30 a fleece, give the lambs a bit of grain to finish them properly and sell them at the end of April at $120.
That is a pretty simple blueprint for making money - what could possibly go wrong?
