Producing Higher Value Wool through a Transition from Romney to Merino Crossbred: Constraining Sheep Feed Demand

Abstract

A strategy to increase wool income for coarse wool (fibre diameter > 30 µm ) producers through a transition to higher value medium wool ( fibre diameter between 25 and 29 µm) was identified, with previous analyses allowing sheep feed demand increases to impractical levels during the transition period. This study modelled a whole flock transition from Romney breed to a 3/4Merino1/4Romney flock through crossbreeding with Merino sires, with sheep feed demand constrained between 55% and 65% of total grown feed. Transition was complete after 12 years, and the final 3/4M1/4R flock had higher COS (cash operating surplus; NZD 516/ha) than the base Romney flock (NZD 390/ha). Net present value analyses showed the transition always had an economic benefit (up to 13% higher) over the Romney flock. In a sensitivity analysis with sheep and wool sale prices changed by ±10%, higher sheep sale prices reduced the economic benefit of the transition (NPV up to 11% higher) over the Romney flock, as sheep sales comprised a higher proportion of income for the Romney flock, and higher wool sale prices increased the benefit (NPV up to 15% higher) of the transition to 3/4M1/4R over the Romney flock. This study demonstrated a whole flock transition from Romney to 3/4M1/4R breed was profitable and achievable without large variation in sheep feed demand, although the scale of benefit compared to maintaining a Romney flock was determined by changes in sheep and wool sale prices.