The relative profitability and environmental impacts of different sheep systems in a Mediterranean environment

The implications of agricultural commodity price scenarios upon the profitability and environmental impacts of various sheep systems in a main agricultural region of southern Australia are assessed using a whole‐farm bio‐economic model. A range of sensitivity analyses reveals that Merino flocks that specialise in crossbred lamb production are in many situations the most profitable flocks. This finding means that the most profitable sheep system emphasises crossbred prime lamb and wool production and represents a shift away from the traditional Merino wool sheep system in the study region. Moreover, farming systems with Merino flocks based on purchase of replacement ewes for crossbred lamb production generate much less adverse environmental outcomes, including less greenhouse gas emissions and reduced groundwater recharge to slow the onset of dryland salinisation.