IWTO discuss wool farm economicsThe success of sheep farming depends on careful management and best practices. Ensuring each animal’s welfare is the wool grower’s top priority. Here, International Wool Textile Organisation offers a brief overview of the business and economics of growing wool.



The Best Practices of Wool Farming

Many sheep farms are family businesses that have been passed from generation to generation. Most farm managers work for at least 15 years in junior positions before being promoted. They are usually university educated so that they have a full understanding of the animal science and business practices.

Best practices in sheep farming depend on five interrelated factors:

  1. The type of farm, i.e. wool, meat or mixed
  2. The availability of fresh water
  3. Topography – the lay of the land, i.e. rocky, hilly, flat, etc.
  4. Laws of the land – each territory has different laws relating to animal health, water and soil management.
  5. Region-specific weather: Land and animals must be managed and cared for in an optimal way that takes all environmental factors into account: rainfall and temperatures must be considered, as well as other factors, such as parasites, predators and overall animal health.

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One of the most important factors in sheep farming is the management of grazing pasture. Sheep do not need supplemental feed, except in extreme conditions. Farmers thus spend much of their planning on ensuring that the size of their flocks fit the carrying capacity of the land, and devising effective rotation schedules to allow their pastures to recover.

Once the business of farming is proceeding as planned, the costs and yields will obviously vary from farm to farm. However, some of the global averages are as follows:

  • A Merino ewe delivers 4,5kg of wool every 12 months.
  • At current prices, a farmer can sell the wool for US$12 per kilogram on average (depending on the quality of the fleece). This means that each sheep generates an income of US$50-55 per annum.
  • The purchase price of a sheep is roughly US$175, which means it takes about four years to recoup the cost of each sheep.
  • Other costs include maintenance, overheads, labour, husbandry and shearing.

For More About Wool Farming

Dive deeper into the world of wool sheep on iwto.org. We’ve also got some great Wool Resources including Fact Sheets, Wool Notes, and more.

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