Economic evaluation of selecting sheep for wool production

Abstract

A technique is described for assessing the profitability of selecting sheep for wool production. A model of the breeding system incorporating three submodels is developed: one to represent the flock from which the selection intensities for rams andewes are calculated; a second to determine gains made in wool production and the year in which they accrue; and the third uses discounting procedures to examine the economics of selecting for wool production. Flock and genetic parameters were set at 'average' values for an Australian Merino wool producer and gains were determined for a range of lambing percentages. Three measures were used to evaluate profitability; the net present value of the programme which shows overall profits, the internal rate of return, which gives the earning rate of the programme, and the payback period, which identifies the number of years before early costs are repaid. A sensitivity analysis was used to examine changes in the three measures of profitability resulting from changes in interest rate, wool price, costs for labour and computer analysis, wool testing costs and lambing percentage. Profitability was sensitive to changes in all parameters except wool testing charges, and of the remainder the producer has a degree of control only over labour costs. A programme can be profitable, however, if wool price and lambing percentage are adequate and costs can be kept at reasonably low levels. Simple breeding programmes should be studied in which labour inputs are kept to a minimum or where costs are confined to studs (nuclei) and genetic gain disseminated by the sale (migration) of rams.

Some benefits and costs of genetic improvement in New Zealand's sheep and beef cattle industry

“…For wool selection in Australia, Thatcher & Napier (1976) reported a break-even date of 6 years when recording costs were $0.50 per sheep, althought this referred to successive -and therefore cumulativerounds of selection. At 100% lambs weaned per ewe joined and recording costs of $1 per sheep, the net present value of continual selection was about $280 in a 200-ewe flock.…”

Sex and selection for fleece eight in Merino Sheep

“…Cost of making the observations required for selection is an important factor limiting application of objective measurement techniques to sheep selection. Previous studies of cost effectiveness of selection have been at the budgetary level (for example, THATCHER and NAPIER 1976). The present study considers a range of selection technologies forming a graded series of cost effectiveness, within the framework of the prediction equations for embody two extensions I. averaging of ram and ewe selection differentials i = (iR + $12 or, more correctly, averaging the genetic superiorities of those rams and ewes selected to become parents i h2 = (iR + i~) h~/ 2 2. scaling of responses separately for each sex in a manner which reflects the proportional responses which would be observed for identical genotypes in ram, ewe, and wether internal environments.…”