AWI Wool Clip day profitable time for Wickepin producers

Sheep profitability into the future was one of the key themes of the Australian Wool Innovation Wool Clip day in Wickepin last week.

Other topics included profitable pastures and crop grazing, lamb carcase grading and an update on global wool economics.

Australian Wool Innovation (AWI) head of on-farm research, development and extension Jane Littlejohn opened proceedings and invited producers to have their say and question the speakers on the range of topics.

First speaker was Planfarm consultant Nathaniel O'Hare who highlighted the role of management decisions and lambing percentage on producers' gross margins.

He said the average total farm income for Planfarm clients in 2011-12 was $368 per hectare, or $227/ha gross profit, while the top 25 per cent farm earners banked $449/ha at a $270/ha gross margin.

"Future earnings (next five to 10 years) of top 25 per cent were estimated to increase to $559/ha ($346 gross)," Mr O'Hare said.

This accounted for sheep sales as the main contributory adding $71/ha to the predicted future income, with wool contributing $39/ha extra income.

The future model brought lambing up to 100 per cent as compared to 81 per cent and 84 per cent for average and top 25 per cent respectively.

Mr O'Hare said sheep production offered resilience to a mixed farming system and was a driver to improved profitability.

Icon Agriculture principal Andrew Ritchie said management was the key driver in putting an extra $7.50 per dry sheep equivalent (DSE), or 30 per cent more, in the bank.

This was the difference of an average sheep farm gross margin ($24.53/DSE) compared to a top 25 per cent gross margin ($31.98/DSE).

"Rule number one, sheep must be in good condition," Mr Ritchie said.

He said the way to profitable and practical management was to target production levels and focus on livestock trading profits. This could be achieved by lifting lambing and survival rates.

"An extra 5 to 10 per cent increase in lamb markings can make an enormous difference to the bottom line," he said.

"Labour-saving infrastructure is worth investing in to make sheep work easier and because it is time-saving."

With climate variability predicted to create shorter growing seasons in WA's sheep/wheat zone, AWI environment, climate change and carbon manager Gus Manatsa spoke on sustainable pasture systems.

With grazing enterprises under pressure, he said farmers could opt for increased summer growing perennials with attention placed on higher soil fertility.

He said increased phosphorous (P) costs due to the carbon tax would require the development of more P-efficient pasture legumes.

"Presently there is a relatively high inefficiency in P use (less than 20 per cent)," Mr Manatsa said.

He said use of native shrubs would be beneficial to increased stocking rates which could lead to less supplementary feeding.

Mr Manatsa said genetic improvement in animals would enable more wool production at same body size.

Murdoch University professor David Pethick told the Wool Clip delegates that Australia was in a dominant position for global lamb markets.

He said Meat and Livestock Australia was predicting a soft recovery of sheep and lamb numbers around the world.

"Eating quality will be critical," Dr Pethick said.

This would be dictated by the role genetic fat played to increase tenderness, juiciness, flavour and overall consumer taste.

Dr Pethick said Meat Standards Australia (MSA) graded lamb research was still to define new traits which included the eating quality that intramuscular fat could provide.

"In the next five years meat processing grading via camera technology hook-up will focus on individual carcases which will move MSA into phase two," he said.

Department of Agriculture and Food development officer Jonathon England's field trial talk on grazing crops at Luke Ledwith's sheep farm in Kondinin showed minimum yield penalty.

Mr Ledwith said the trial's success led him to a decision to increase crop grazing by 10 per cent next year to 300ha.

AWI analyst, market intelligence and reporting Allan Wang said global wool supply would remain tight, especially for the finer microns.

He said while economic weakness in Europe was impacting on consumer confidence and expenditure, demand indicators remained positive.

"There is accelerated growth across all consumer sectors in the emerging economies and China will buffer against eurozone weakness," he said.

"Australia produces 60 to 70 per cent of the wool consumed in the world apparel markets."