Merinos - a profitable diversification option for most North island hill country

Abstract

Fine wool production is a small but increasingly important industry in New Zealand. To minimise the effects of fluctuations in world fine wool supply and demand, New Zealand must concentrate on quality. Results of a comparison with Romney ewes and lambs on hard hills at the Wanganui Hill Research Area, show that Merinos have performed well. Although flystrike and a lower tolerance to internal parasites were observed, predicted feet and wool quality problems did not eventuate. Any special management required has been more than compensated for by the 48% higher gross margins achieved in 1988-89 ($25.90 per stock unit or $337/ha from Merinos). Throughout the 1980s even when SMPs supported high lamb prices, Merinos would have been a better proposition than prime lamb. All farmers, especially those changing to Merinos, need to concentrate more on wool quality and quantity rather than lambing percentages and lamb weights. A Merino enterprise can be entered in two ways. Buying Merinos has a high initial cost, but the financial benefits are immediate and can be budgeted with more confidence using recent prices. Using Merino rams over crossbred ewes is a low cost alternative which is much slower (15 years), but the financial gains, although present from year 1, are much reduced, particularly in the early years. In North Island hill country where inputs are low, Merinos are proving to be a profitable diversification option. The increase in disposable farm surplus of $33,100 in the 1989/90 year from a 3200 sheep stock unit hill country farm, has been much needed by farmers in recent years, and may have saved some from having to leave farming. Keywords Merinos, hill country, wool, diversification