Some record gross margins for wool & lambs

Most sheep producers, whether they focus on wool or lamb, will tell you that 2021-22 was a pretty good year.  The LFMP, which conducts a very detailed survey of 124 producers across Victoria confirms the good year for most enterprises, with a few exceptions.

Figure 1 shows that Victorian Sheep and Wool producers had much better than average years, except for lamb producers in Gippsland.  The improvements in real gross margins ranged from 23.5% better than average for Gippsland Wool, to 91% better for Northern Victorian wool.

Gippsland gross margins for lamb performed 18% worse than average.  The small number of lamb producers surveyed in Gippsland have always performed well, with the best gross margins per hectare of all enterprises.  The last two years have been below average, with lamb income per hectare being the driving factor.  A change in participants would explain the difference, or it might be an ongoing impact of the fires in early 2020.

Western Victorian lamb producers had their best year since the heady days of 1973-74 (Figure 2), with their gross margin up 8%.  It was the third big year in a row for Western Victorian lamb producers, with margins outstripping wool by 43%.  We need to be a little careful with such comparisons, as ‘Western Victoria’ covers areas from just south of Horsham to just north of Portland. 

The variation in annual rainfall is from around 400mm to over 700mm, with more wool producers in the north, and lamb in the south.

In Northern Victoria and Gippsland, gross margins are much closer between lamb and wool.  Northern Victorian wool producers had their best year since records began in 2004-05, outstripping lamb margins, which just missed out on a record.