Wool prices and sheep breeding objectives - a historical perspective

Abstract

An analysis of weekly wool prices for different fibre diameter market indicators from 1950 to 1993 was conducted to determine appropriate economic values for the calculation of sheep selection indices. An important determinant of breeding objectives and selection indices is the percentage increase in the value of wool for each 1 8m reduction in fibre diameter, termed index percentage (IP). From 1950 to 1981 the appropriate IP value for fine (20 8m), medium (21 8m) and strong (23 8m) wool Merinos was 5%. From 1981 to 1993 the mean weekly IP values for fine, medium and strong wool Merinos were about 20, 15 and 8% respectively. The 5 year moving average IP values in 1993 for fine, medium and strong wool Merinos were 25, 20 and 8% respectively. The distributions of weekly wool prices and IP values are not normal and are positively skewed. Therefore, a safer, more conservative approach is to calculate the median weekly IP values for any period or to use median weekly wool prices to calculate IP values. The median weekly IP values for 1981-1993 were 20, 11 and 8% for fine, medium and strong Merino wools respectively. Thus recently there has been a larger relative premium for fibre fineness which could be a permanent trend. Selection efficiencies for clean fleece weight and fibre diameter in fine and strong wool Merinos are predicted to be at least 90% when 10% and 5% indices are used respectively. Selection efficiency in medium wool Merinos when a 5% index is used is only 79% if the 'true' IP is 15%, or 90% if the 'true' IP is 10%. The 10% and 5% indices are currently calculated and made available to the ram owners who participate respectively in the N.S.W. Merino fine and medium wool sire evaluation schemes. It is suggested that there is a case for using indices with higher fibre diameter premiums (i.e. 20% and 10% respectively), than those currently provided in the fine and medium wool schemes.