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An economic analysis of sheep flock structures for mixed enterprise Australian farm businesses

Author

Listed:
  • Young, Michael
  • Kingwell, Ross
  • Young, John
  • Vercoe, Phil
Abstract
A strategic question facing many mixed enterprise broadacre farm businesses in Australia is, ‘What sheep flock size and structure is most profitable to complement the farm’s cropping enterprises?’ This study answers this question for a typical large mixed enterprise farm business in a key production region of Australia. Whole-farm bioeconomic modelling, combined with broad-ranging sensitivity analysis, is used to examine the profitability of different sheep flock structures and sizes. We find the most profitable flock structure is to run Merino ewes and turn off finished Merino or firstcross lambs. The profitable selection of these flocks is robust to commodity price variation but does require the farmer to give more attention to sheep management. The correct choice of flock structure greatly adds to farm profit. A farm based on cropping and a self-replacing Merino flock using surplus ewes for first-cross, meat lamb production earns 33 per cent more profit than a similar farm that runs a traditional self-replacing Merino flock that emphasises wool production. Of far less importance than flock structure, as a source of additional profit, is to increase flock size or adjust cropping intensity.

Suggested Citation

  • Young, Michael & Kingwell, Ross & Young, John & Vercoe, Phil, 2020. "An economic analysis of sheep flock structures for mixed enterprise Australian farm businesses," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 64(3), July.
    • Handle: RePEc:ags:aareaj:338502
    DOI: 10.22004/ag.econ.338502
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    References listed on IDEAS

    as
    1. Gibson, Lauren & Kingwell, Ross & Doole, Graeme, 2008. "The role and value of eastern star clover in managing herbicide-resistant crop weeds: A whole-farm analysis," Agricultural Systems, Elsevier, vol. 98(3), pages 199-207, October.
    2. Bardsley, Peter & Harris, Michael, 1987. "An Approach To The Econometric Estimation Of Attitudes To Risk In Agriculture," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 31(2), pages 1-15, August.
    3. Kingwell, Ross S., 2011. "Managing complexity in modern farming," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 55(1), pages 1-23.
    4. Flugge, Felicity & Schilizzi, Steven, 2003. "Greenhouse Gas Abatement Policies and the Value of Carbon Sinks: Do Grazing and Cropping Systems have Different Destinies?," 2003 Conference (47th), February 12-14, 2003, Fremantle, Australia 57865, Australian Agricultural and Resource Economics Society.
    5. Kingwell, R. S. & Ghadim, A. K. Abadi & Robinson, S. D. & Young, J. M., 1995. "Introducing Awassi sheep to Australia: an application of farming system models," Agricultural Systems, Elsevier, vol. 47(4), pages 451-471.
    6. Poole, M. L. & Turner, Neil C. & Young, J. M., 2002. "Sustainable cropping systems for high rainfall areas of southwestern Australia," Agricultural Water Management, Elsevier, vol. 53(1-3), pages 201-211, February.
    7. Tas Thamo & Ross S. Kingwell & David J. Pannell, 2013. "Measurement of greenhouse gas emissions from agriculture: economic implications for policy and agricultural producers," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 57(2), pages 234-252, April.
    8. Villano, Renato & Fleming, Euan & Fleming, Pauline, 2010. "Evidence of farm-level synergies in mixed-farming systems in the Australian Wheat-Sheep Zone," Agricultural Systems, Elsevier, vol. 103(3), pages 146-152, March.
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    Livestock Production/Industries;

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