Leading sheep consultant Geoff Duddy believes Merinos could offer more value to producers compared to crossbreds, especially if Merino lambing percentages can be lifted.
Speaking at a Local Land Services and Federation Council producer event in Oaklands, Mr Duddy of Sheep Solutions said in the last four years the Merino had averaged around 93 per cent of the carcase value of a crossbred lamb.
"You put on top of that the value of the wool that you cut off the Merino and you at least make the same money back compared to a crossbred lamb or probably do better," Mr Duddy said.
"Around 30 per cent of Australia's slaughter lambs are pure Merinos."
Mr Duddy acknowledged that producers rarely turn off Merinos as quickly as crossbreds, but said if marketed at the right time it was possible to catch a premium.
"Merinos are generally slower growing but most of the Merinos are coming in at 11 to 12 months of age, in June-July," he said.
"They're quite heavy lambs at that stage and because there's so few lambs in the system, there's demand there, prices are pretty high in that June/July period."
Mr Duddy said it was Merino lambing percentages where there was the most work to be done and the greatest gain financially to be made.
"We're lucky fertility is lowly heritable because we've been flogging the Merino for years, allowing her to 'do it hard' because we know she'll still produce a product (wool)," Mr Duddy said.
"Thankfully the average medium-frame Merino will scan about 130 pc (fetuses to ewes scanned) and there is potential to continue to lift lamb survival rates through strategic feeding and improved lamb management."
Improving Merino lambing percentages
Mr Duddy said if fed and managed properly, Merinos could be good mothers.
"The general recommendation is to separate your twins," Mr Duddy said.
"I would separate them from scanning time, I would feed the twins bypass protein, something like a cotton-seed meal or canola meal to preferentially develop the placenta.
"At scanning the placenta is mid-way through its major growth/development stage and the average fetus age is 65 days.
"This is an ideal time to preferentially feed twin bearing ewes to help develop the placenta which improve lamb birth weights, milk production and ultimately lamb survival."
He predicted sheep meat prices would remain high over the next few years due to lack of breeding ewes and the interest in finishing lambs.
"Producers will struggle to rebuild flocks quickly - due to financial constraints and availability of ewes.
"Many will look to retain and/or source Merino wether lambs for cash flow.
"Taking a percentage out of the Merino wether lambs out of the slaughter market will help keep lamb and meat prices high in the short term."
Hayden Hutchins, Elaine, Narrandera recently topped the Narrandera first-cross ewe sale, selling a pen of March/April 2019-drop ewes for $320 per head.
They would usually keep their first-cross ewes but were moving towards running more Merinos. "We usually run around 1300 Merinos and 500 crossbreds, this year it's more like 1400 Merinos and 300 crossbreds," Mr Hutchins said.
He said as they sold most of their lambs over the hook, whether they were out of a Merino (joined with Dorset or Border Leicester rams) or crossbred ewe made little difference.
"We sold 1300 suckers to Coles this year, some were out of the Merinos, some were out of crossbreds, they get mixed together," Mr Hutchins said.
While he got the value of the wool off Merinos, they could get more lambs out of crossbreds.
"From our crossbreds we'll get lamb marking rates of 140-145 pc, Merinos are more like 115 pc," he said.
Take value of store lamb into account
The value of a lamb at store weight needs to be part of the calculation when deciding whether to sell or feed lambs, according to Sheep Solutions consultant Geoff Duddy.
"In a feedlot operation the major cost, around 65 per cent, is the value of the lamb you start with," Mr Duddy said.
"Even if you breed it yourself you should value it at what you can sell it for."
He said if a producer broke down both the value of the store lamb along with feeding costs over the six to seven week period it is in a feedlot, the store lamb should be 85 per cent or less of the value of the finished lamb on a cents per kilogram basis, to minimise risk and hopefully ensure a reasonable profit.
Mr Duddy said producers should also consider the average peaks and troughs of lamb prices during the calendar year.
"It's about asking the question, am I better off selling them as store lambs earlier or taking them through to finished weights?" Mr Duddy said.
"Most times, because of the strong store lamb market, producers are financially better off selling earlier and letting others finish their lambs.
"While we're lucky now that forward contracts can help with the 'to sell or to finish' decision, feedlotting is not necessarily a money making option.
"Do your sums - if the season is against you or the risk of low profit margins are high, you are likely to make more per head selling a store lamb."
