Wool outperforms meat encouraging increase in Merino flock numbers

The Australian wool market may be sluggish but compared to the sheep and lamb processing indicators it has been the stand out performer for the past 12 months with a price 4.5 times higher than Merino lambs on a per-kilo basis.

Meat and Livestock Australia, in conjunction with Australian Wool Innovation and the Australian Wool Exchange, shared combined data that revealed while the Eastern Market Indictor for wool had fallen 12 per cent in 12 months, in comparison, the heavy lamb indicator had fallen 38 per cent.

MLA market information manager Stephen Bignell said the result meant Australian sheep producers were more likely to grow wool than focus on meat production.

“At present, provided producers can secure shearers, Merino wool production is possibly more lucrative than meat production,” Mr Bignell said.

“This reduction in Merino ewe numbers has been driven by better prices for lambs over the last few years, lower wool prices, and access to shearers, among other factors,” Mr Bignell said.

But the trend was expected to change as the price for lambs remained subdued.

“The wool price is nearly 4.5 times higher than the price for Merino lambs on a per-kilo basis,” Mr Bignell said.

“This is the highest the EMI to Merino lamb ratio has been in the last three years.”

The EMI to mutton ration was above seven — the highest in more than three years.

The price difference was an increasing incentive for producers to retain Merino lambs and mutton on farm and shear a fleece from them.

Mr Bignall predicted that the trend could result in a reversal in the flock demographics with the number of Merinos on farm increasing.