Genetics of Coloured Sheep
the short and (relatively) simple version
There are two main gene series that control the colour of New Zealand sheep: one governs colour pattern and the other governs the actual colour that the sheep will be, in any parts that are not white. Every sheep inherits two genes of each series, one from each parent.
In the pattern series, called the Agouti locus, the gene most common in New Zealand prevents any colour except white. There are several genes for mixed patterns (for example black and tan, sometimes called "mouflon", with white belly and face markings, or badgerface with a coloured belly, light body and face markings), and one gene which makes the sheep the same colour all over ("self colour").
If a sheep inherits the gene for white pattern from either or both parents, it will be white. That is because the white gene is "dominant" over all the other genes at the Agouti locus. A white sheep may be carrying one of the other genes in the series (most often "self colour") and on average will pass it on to half its lambs. If one of these white "carrier" sheep mates with another white "carrier" sheep, and if the offspring happen to inherit the coloured gene from both parents, the result is coloured lambs.
Another type occasionally seen is the rare transverse stripes. The stripes are most obvious in a newly shorn young sheep. The inheritance of this type is not fully understood.
The actual colour of a coloured sheep depends on what genes it has inherited in the colour series, the Brown locus. Only two different genes are known: black, and the less common brown (often called "moorit"). Since black is dominant over brown, if a sheep is to be moorit it must inherit the moorit gene from both its parents. A sheep with one each of the black and the moorit genes will be black, but may pass the moorit gene on to its lambs.
Black and brown sheep actually come in various shades. Moorit lambs are coffee-coloured at birth, but their wool often lightens to a warm cream after a few years. Black lambs also lighten as they get older, sometimes ending up quite a pale grey. Wool also fades at the tips as it grows, due to the action of sunlight and weather: moorit becomes paler, and black/grey wool often becomes brownish at the tips. A black Romney in full fleece is sometimes mistaken for a moorit, but if the fleece is parted it will be seen that the wool nearer the skin, where it has been protected from sunlight, is actually black or grey.
There are several other gene series that can affect the appearance of colour in sheep. Notable in New Zealand is the Spotting locus. Spotting occurs particularly in Merinos or part-Merino breeds such as Polwarth, as well as Poll Dorset and crosses. It can give some spectacular piebald effects.