How Fibre Diameter Influences Profitability of Wool Sheep Flocks

In sheep production systems where wool represents a significant proportion of total income, fibre diameter is one of the variables that producers can most directly influence. Many wool producers invest a lot of time evaluating the “ideal” micron range for their flock which is justifiable given fibre diameter carries considerable weight in genetic decisions. 

However, an important question arises: to what extent can fibre diameter alone define the economic outcome of a system? Or, put differently, does being within a certain micron range increase or decrease the chances of achieving a better financial result? 

Methodology 

An analysis of farm benchmarking data was conducted to establish the relationship between fibre diameter ranges and profitability. 

The analysis used real data from farms included in Agrista’s benchmarking database, covering the 2016–2025 benchmarking period for wool sheep enterprises. 

The objective was to assess the relationship between the average fibre diameter of flocks and their final economic performance, using consistent and comparable data over time. 

By considering a ten-year period, the analysis encompasses a wide range of production and market conditions, allowing for more robust conclusions. During this time, there were significant variations in: 

• wool prices and price relationships between micron categories, 

• meat prices, and 

• input costs. 

In addition, different environmental contexts were included, especially regarding rainfall and its annual distribution. This diversity of economic and climatic situations provides a broad set of production scenarios, strengthening the analysis by avoiding dependence on either seasonally favourable or unfavourable years. 

Return on Assets Managed (ROAM) was used as the key indicator of economic performance. ROAM is a financial efficiency ratio measuring operating profit relative to the total value of farm assets under management. Rather than expressing ROAM as an absolute value (profitability percentage), the result of each wool producer was expressed as a percentile rank within each year.  

A percentile rank is a ranking mechanism that places participants in order of financial performance ranked on ROAM from 0 to 100%.  ROAM results were ordered from lowest to highest, and each observation was assigned a value between 0% and 100%, where: 

• 0% represents the worst economic result of the year, 

• 100% the best financial performance of the year, and 

• intermediate values indicate each farm’s relative position within the annual distribution. 

In this way, each point in the analysis reflects how good or poor a system’s relative profitability was for a given fibre diameter, independently of the general economic context of that year. 

The dataset included over 500 completed financial years, considering only wool enterprise performance. Wool trading wethers were excluded to maintain comparability between flocks producing both wool and meat. 

Results

Figure 1 shows the relationship between the average fibre diameter of flocks and their relative profitability position within each year (percentile), based on the 513 cases analysed over the ten-year study period.

At first glance, a wide dispersion of points can be observed, indicating that relative profitability is multifactorial. This means that many factors influence a system’s position within its year, and fibre diameter alone does not guarantee a good or poor financial result. 

Other variables that influence profitability in addition to fibre diameter are wool production, mortality, proportion of wethers, sale weight, cost structure, labour efficiency, weaning percentage, and price, among others. For example, a flock with an average fibre diameter of 17.5 microns could fall into either a high or low percentile depending on its combination of wool or meat production, cost structure, and management efficiency. This demonstrates that other system variables can significantly alter relative profitability, even within the same micron range. 

However, within this dispersion, a general trend can be identified: as the average fibre diameter decreases below 16.5 microns, flocks tend to appear less frequently among the highest profitability percentiles—that is, they have lower chances of achieving the best relative results. 

In the group of flocks with diameters between 15.5 and 16.5 microns, a clear imbalance was observed: 27 cases were located in the bottom 30% of relative profitability (percentiles 0–30%), while only 7 cases reached the top 30% (percentiles 70–100%). 

This trend becomes even more pronounced in flocks with extremely fine diameters (<15.5 microns), where—although the number of observations was smaller—all were positioned below the median (50th percentile). Taken together, these results suggest that systems producing extremely fine wool face greater challenges in achieving top-tier profitability within their production year. 

What that means to you? 

This analysis clearly shows that fibre diameter alone neither guarantees success nor failure in economic terms. Final profitability depends on multiple factors with some under the producer’s control, such as wool production, management efficiency, and cost structure, and others outside their control, such as selling prices or climate conditions. 

Maintaining systems that optimise the variables producers can control is key to improving financial performance. 

It is also evident that flocks with average fibre diameter below 16.5 microns tend to face greater challenges in reaching the highest relative profitability levels compared to those with slightly coarser fibre diameter. 

In conclusion, the performance of a wool production system should not be evaluated solely on flock fibre diameter. To improve profitability, it is essential to consider the full set of system variables that the producer can manage, combined with close monitoring of external conditions. 

Juan Martín Dutra da Silveira is from Uruguay. Juan completed his Master’s at the University of Melbourne. He is part of his family business, raising commercial cattle and commercial and seed stock merinos. Juan owns his own consultancy business and joined the Agrista team in 2023.