THE cost of DNA testing appears to be behind Australian Wool Innovation cutting off funds to its nucleus flock.

In a letter to its levypayers AWI said cost would deter DNA testing by stud breeders.

"The cost of genotyping is currently in the order of $130 and would have to drop to about $20 before a significant uptake is expected, " AWI chief executive Stuart McCullough and chairman Wal Merriman said in the letter.

Late last year AWI was asked to contribute $4.8 million to a nine-year program costing almost $13 million and involving a 6000-head flock joined over five years and four subsequent years of measurements.

At the time the Sheep Co-operative Research Centre paid $150 for a test that provided a parentage, detection of single gene traits such as pollness and predictions for a range of traits for wool and carcass quality, fertility and parasite resistance.

But Victorian Department of Primary Industries geneticist Dr Ben Hay said DNA costings were falling sharply worldwide.

Dr Hay said the cost of reading DNA had dropped by more than $100 in the past five years.

"And we can expect even greater reductions in the next couple of years," Dr Hay said.

Although AWI quoted a $130 test cost in its letter of last week, Sheep CRC chief executive Dr James Rowe said it had contracted a price of $110 for this year's pilot program and stud breeders would pay a subsidised rate of $50.

"We reckon it will be down to $50 next year," he said.

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AWI not OK with DNA