A farm-level economic assessment of the Australian Merino, Dohne Merino, and South African Meat Merino sheep breeds in southern Australia

In Australia very favourable prices for lamb and mutton since 2001 has encouraged a switch from the Merino to other sheep breeds better suited to meat production, namely the Dohne Merino and South African Meat Merino. To date, little research on the performance and profitability of these meat breeds in Australian farming systems has been carried out. A whole-farm bio-economic model was used to assess the likely profitability of these breeds in a southern coastal region of Western Australia. Sensitivity analysis was undertaken to identify the production characteristics that influence farm profit most, and commodity price risk was modelled endogenously to identify the robustness of profitability for each breed. Results indicate that weaning rate, fleece weight and fibre diameter are important to the profitability of each breed to varying degrees. However, despite important different production characteristics between the breeds, these differences generate no clear economic comparative advantage for any one breed in the broadacre farming system of the region studied. This finding, plus the high changeover costs for breed replacement, means there is little economic merit in disinvesting in one breed to fully switch to another.