farmcfo.com.au/tools/sheep-gross-margin · 0412 759 847Sheep gross margin calculator
Choose a starting point from the NSW DPI 2025 sheep budgets, or enter your own flock. The calculator adds up wool, lamb and sheep sales, takes off shearing, health, feed, replacements, selling costs and other variable costs, and shows the gross margin per head, per DSE and per hectare.
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- Income
- $326,518
- Variable costs
- $167,504
- Gross margin
- $159,014
- Per head
- $159.01
- Per DSE
- $53.00
- Per hectare
- $531.82
Wool $13,230, lambs $270,342, other sheep $42,946
3,000 DSE
NSW DPI's published 2025 results, including fodder: first-cross ewes $160.62 per ewe and $53.72 per DSE; Merino wethers at 20 micron $21.14 per head and $17.91 per DSE.
The two starting points come from the NSW DPI 2025 Farm Enterprise Budget Series (prices averaged April to September 2025): first-cross ewes joined to terminal rams, and Merino wethers at 20 micron, each per 1,000 head. Other variable costs is a balancing figure so the total matches DPI's total variable costs, and the area is worked back from DPI's per hectare result. The results come close to DPI's, but not exactly, because wool income is simplified here.
The working
- Wool income = head x kg greasy per head x price ($/kg greasy).
- Lamb income = lambs sold x carcase weight (kg cwt) x price (c/kg cwt) / 100. Other sheep sales = head sold x $/head.
- Variable costs = shearing x head + animal health + supplementary feed + replacements + commission on sheep sales + wool selling costs + freight and levies + other variable costs.
- Gross margin = income - variable costs. Per DSE = gross margin / (head x DSE per head). Per hectare = gross margin / hectares.
General information only. This calculator doesn't take account of your circumstances and isn't tax, credit or financial product advice. Check figures with your accountant before relying on them.
Want the numbers done for you?
Farm CFO builds the budget, the monthly cashflow and the tests your lender will run, at a fixed price.
Read next: Budgeting for wool and lamb
Questions
Why compare per DSE and not per head?
A first-cross ewe and her lambs eat about two and a half times what a Merino wether does, so per head comparisons flatter the bigger animal. Dividing by DSE puts different flocks on the same feed basis, and per hectare shows what the country is earning.
Does gross margin include overheads?
No. Gross margin is income less the costs that change with the size of the enterprise. Rates, insurance, permanent labour, depreciation and interest come out later, in the whole farm budget.
Where are current wool and lamb prices?
AWEX and MLA publish wool and saleyard prices. Use your own recent sales where you have them.