Struggling wool prices pinned against a strong lamb market are likely to influence producer's decisions when it comes to joining.
This is according to analysts who are predicting an expansion of the Merino flock will be unlikely over the coming year.
The latest Mecardo insights report suggests as sheep producers start to think about joining ewes over the next four months, the difference between Merino wool and lamb prices will influence joining decisions considerably.
"In the past, strong wool prices has seen Merino ewes joined back to Merino rams," manager of business development at Mecardo Olivia Agar said.
"In more recent times weaker wool values, relative to lamb prices, has seen more Merinos joined for a first cross or terminal lambs,
"The consistent weak Merino wool prices, relative to trade lamb values, has skewed the flock recovery to sheep other than Merinos."
Ms Agar said for Merinos, October has been an unfortunate time for wool prices to tank.
"Lamb prices have also been lower, but with the 19-micron micron price guides moving below a 100 per cent premium to the trade lamb indicator, we are unlikely to see any expansion in Merino flocks over the coming year," she said.
The benchmark Eastern Market Indicator (EMI) faltered by another 20c last week, the third consecutive week to record a negative result.
The EMI now sits at 1241c per kilogram, clean.
This is 78 cents lower than the corresponding sale of the previous season, a drop of 5.9pc.
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But southeastern Nutrien Ag Solution wool broker David Hart said he is doubtful there will be a dramatic downturn in Merino to Merino combinations, saying producers tend to base their decisions on trends rather than a short-lived downturn in price.
And he warned those producers going for the short term 'sugar hit', would be at the expense of long-term productivity of their flock.
"Every time we get a downturn in the wool market, talk of this scenario does surface," Mr Hart said.
"But I can't discount the possibility of it happening. There are a lot of growers out there that join a certain portion to Merinos and a certain portion to terminals, which gives those growers a great deal of flexibility year in, year out.
"But there is an underlying longer-term issue that growers are well aware of.
"That is, to maintain Merino ewe numbers, depending on your lambing percentages and the fertility of your flock, you can do it for one year, maybe two, but beyond that you end up with a ewe flock structure that is quite old."
He said there is always that possibility of producers switching out of Merinos completely.
"The numbers don't lie, we have seen a decline in Merino ewes as a proportion of the national flock," Mr Hart said.
"Whether or not it is prompted by what I believe is a relatively short term wool market cycle, I am doubtful."
