Wool

Cost of Production Calculator

It is critical for you to know what it costs to produce a kilo of wool so you can decide when and how to sell your clip. Now, with the assistance of the Wool Production Cost Calculator, you can work out your production costs. This will help determine the right time and price to market your wool.

What you need

To calculate the cost of producing your wool, you will need the information listed in the Production Calculator document readily available. You may wish to print this document and keep it handy as a reference while you're collecting the relevant information.

A. Wool Production

Total weight (kilograms) of wool shorn (all sheep, all breeds). Include all wool (greasy kilograms) to be produced from the property in the current 12-month period, which should be similar to the period used for sheep trading (C):	kg
Average Bale weight:	kg

B. Sheep Enterprise Costs

1.	Total cost of shearing and crutching (payments to shearers, shedhands and woolclassers)	$
2.	Cost of shearing supplies (woolpacks)	$
3.	Animal health costs (dips, drenches, vaccines)	$
4.	Contract services and casual labour (lamb-marking and mulesing, sheep classing, contract dipping, mustering and any casual labour used for sheep work)	$
5.	Total quantity of home-grown feed fed out. Feed valued at market price rather than cost of production (if it was not fed to sheep it could have been sold for market value) tonnes x cost/tonne = $
6.	Total quantity of purchased feed fed out: (include all supplementary feed purchases, hay, grain blocks, cubes) tonnes x cost/tonne = $
7.	Transport and cartage (include all wool and sheep transport costs)	$
8.	Other (include selling, marketing, testing & commission costs where applicable)	$
	Total sheep enterprise costs Formula: Sum B1-B8	$

C. Sheep Trading Profit & Loss

Use the most appropriate 12-month period (growers with autumn-lambing flocks may be better using April-March)

1.	Value of sheep sales (prices received for ALL sheep sold from the enterprise for the 12 month period)	$
2.	Value of sheep purchases (prices for ALL sheep purchased for the enterprise for the 12 month period)	$
	Profit/Loss from sheep trading Formula: C1-C2	$

D. Labour Costs

1.	Cost of permanent labour (include any permanent paid labour, but not owner/operator or family labour unless they are paid a wage or salary. Include all on-costs, such as superannuation, workers compensation)	$
2.	Owner/operator allowance. Owner/operator allowance should be equivalent to remuneration for the manager ($30,000 p.a.) and should be realistic. (Note: This allowance only needs to be included if it is not included in D1 permanent labour.)	$
3.	Costs of additional family labour. Cost of additional family labour should only be included if it is not included in D1 permanent labour; up to owner's discretion for $ figure.	$
4.	Total cost of labour Formula: D1+D2+D3	$
5.	Percentage time spent on sheep work. Allocation of labour is based on an estimate of the time spent by all labour on sheep work, or work directly related to wool production. This figure needs to account for a proportion of administration and general maintenance costs etc.	%
6.	Total labour cost of sheep enterprise Formula: D4 x D5	$

E. Overhead Costs

Option 1: If your farm income is wool only, all overhead costs should appear in Wool O/H Expenses column (column 3).
Option 2: If Wool Enterprise is only part of on farm income (for example, you receive income from grain, lambs, beef etc), then;
1) List total overhead costs in (column 1)
2) List % of that cost that should be attributable to the Wool Enterprise (column 2).

		1 Total	2 % attributable to wool	3 Wool overhead expenses
1.	Repairs and maintenance: shed and yards
		$	%	$
2.	Repairs and maintenance: plant and equipment
		$	%	$
3.	General insurance	$	%	$
4.	Administration	$	%	$
5.	Rates, agistment and land lease costs
		$	%	$
6.	Fuel and oil	$	%	$
7.	Electricity and gas	$	%	$
8.	Interest, bank charges and equip. lease costs
		$	%	$
9.	Fertiliser costs	$	%	$
10.	Fencing (new/repairs)	$	%	$
11.	Waters (bores/pipelines)	$	%	$
12.	Others	$	%	$

Total Overheads

F. Total Cost of Wool Production

Formula: B+D+E/-C $

G. Cost of Production (cents/kg)

Formula: F/A1

H. Cost per bale ($/bale)

Formula: G x A2

Please contact your Elders District Wool Manager to determine the right marketing strategy for your business.

How to use the wool production cost calculator

Figures can be changed by simply clicking in the relevant box and typing a new figure.
To view the total value for each calculation, please click your mouse inside the total box for that calculation once you have filled in each of the relevant fields.

Cost of Production Calculator

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