Also known as dermo or lumpy wool, mycotic dermatophilosis is common in Merino sheep in the higher rainfall areas of Australia caused by a bacteria (Dermatophilosis nodosus). The disease is easily transmitted between sheep by contact.
Dermo is mainly distinguished by scabs and matted wool, principally on the back, making shearing difficult and predisposing animals to blowfly strike. It is a major discount factor in wool valuation. Infected sheep tend to develop columns of hard lumps along staples whereas fleece rot forms in bands parallel to the skin. In mild cases dermo can be easily confused with fleece rot.