Kerry Dwyer explores some options for farmers trying to make sense of low wool prices.

In July we saw another flurry of talk about crossbred wool, driven by pitifully low prices for the product. Leaving that aside for the moment, sheep farmers have some thinking ahead before buying rams over the next six to nine months.

Many, if not most, crossbred sheep farmers are facing a deficit between selling wool and paying for wool harvesting costs. Where do you aim to breed your sheep to handle this in the next few years? I am not advocating any particular option, but I am advocating having a plan.

Let’s look at the three basic options available:

1. Grow no wool or breed a sheep that doesn’t need shearing;
2. Put less emphasis on wool and suck it up about the shearing costs;
3. Aim to grow more and/or better wool.

No wool

There are sheep out there which have been bred to have either no wool, or they shed their wool on an annual basis. They are certainly a viable option for sheep farming, requiring no or little shearing or crutching, and their breeders have made big steps in the past 30 years to produce a sheep with improved lambing, survival and growth attributes.

The minus on this pathway is that it is difficult to backtrack in the event of a sudden boom in crossbred wool prices. Also, it raises the question that if you are producing solely meat, is sheep or beef the most productive and/or profitable option?

While thinking about this article, I was reminded that about 20 years ago there was a vaccine being commercialised, to cause wool shedding in sheep. I saw it in Australia about 2005, under the trademark of “Bioclip”.

The process was to inject the sheep and put a net on them, then remove the net and the fleece together a few weeks later. The system wasn’t a commercial success, and it did have some limitations as regards timing, but it certainly did get the fleece off the sheep. In Australia it was pushed as using a natural chemical, was better for animal welfare and more acceptable to the fringe (PETA) than conventional shearing.

Less emphasis on wool

In breeding terms, fewer traits selected for the faster gain can be made in any individual trait. It’s damn tough to breed a sheep that can produce three lambs that wean at 40kg, that clips 6kg of wool and can win the Melbourne Cup. Reduce the ambition and it gets easier to achieve gains.

When buying crossbred type rams, look at the Dual Purpose Maternal Worth Index. While the heading is that the ram you are buying is “dual purpose” what exactly does that mean?

The index is built by predicting the genetic merit of the individual ram, and is based about 50% on lamb growth traits, 28% reproductive traits, 13% survival traits and 7% wool traits (on 2017 figures from SIL). This is the economic importance given to the various areas, based on their current importance to New Zealand crossbred sheep farmers. So, consider that the ram you are buying is dual purpose for reproduction and lamb growth, with a little bit of wool selection.

The relative weighting of these traits is different in the finer wool selection index.

The next step in less emphasis on wool might be to follow many other sheep farmers around the world, to have some of the meat breed sheep in the ewe flock. Certainly having halfbred Dorsets or Southdowns or Suffolks will give faster growing lambs in many environments.

More or better wool

I have farmer clients who have their flocks producing very high levels of crossbred wool. When I look at their profit after shearing it doesn’t look much better than those who haven’t put much effort into that area. I get the feeling this might have been a blind road in the evolution of sheep farming. Having an animal that grows more fibre means you have to spend more in getting it off.

Or you can harvest a better quality of crossbred wool. I am not condemning the effort but do question whether you get adequately paid for it? There are plenty of pundits in the wool industry calling for better quality control from farm to factory, unfortunately that does not necessarily make you richer.

Or you can fine the micron, since finer wool is historically more valuable. Maybe you need to farm Merinos to be a serious sheep farmer. The adaptability of finer-woolled sheep to wetter environments is still being sorted out, but that may be the future of wool growing.

Did you know?

Statistics list sheep numbers per country as:

Note that wool production is probably not that important for many of these sheep-producing countries.

Total world fibre production looks like:

• Oil based synthetic fibres: 67m t/yr
• Cotton: 25m t
• Cellulose-based synthetic fibres: 7m t
• Wool: 2m t (greasy)

Figure 1 shows the well known Korean War blip in wool prices which kept a generation of sheep farmers enthused. I benefited from the late 1980s surge in wool prices, which ended with Tiananmen Square and the breakup of the Soviet Union. The last 10 years are not shown but the trend has not been upwards.

Figure 2 puts an inflation adjusted value on wool prices. Farmers of my generation have seen this in real terms with crossbred wool falling from over half their income to below 10%. The national flock peaked at somewhere over 70m sheep in the early 1980s and now sits about 27m. That has been the natural consequence of the decline in the real price of wool, and is reflected in the volume produced, shown in Figure 3.

In 1991 I heard Professor Don Ross speak at Lincoln University, after a lifetime devoted to wool he predicted that crossbred wool would reach zero real value in the next 20 years. Maybe his time frame was wrong but I keep thinking his sentiment was correct.

As I said earlier, I am not pushing any particular barrow. I admire the enthusiasm of the new generation striving to improve wool returns, but as individual farmers you make the decisions on what you invest in and what you produce.

• Kerry Dwyer is a North Otago farm consultant and farmer.

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