Evaluate the Economics of Your Flock
by Gary Ricketts & Richard Cobb
Volatility in lamb prices has been a major problem in the U.S.
Sheep Industry for many years and was evident again in 1998. Lamb prices often
drop very quickly but work back up very slowly, which makes for difficult marketing
decisions. However, in spite of price volatility, it is important that we know
our costs and determine how we can cut costs, improve management, and improve
productivity, so our operation remains profitable. While there are many factors
that affect profitability, the single most important factor is ewe productivity.
The more lambs raised per ewe per year, the greater the chance of making a profit
even when prices are low. If a ewe raises only one lamb, then that lamb must
cover all of the ewe's expenses. However, with two lambs the ewe's expenses
each lamb must carry are nearly cut in half. Ewe productivity takes into account
at least three factors:
- Pregnancy Rate percentage of the ewes in the breeding flock that actually
- Prolificacy - the number of lambs born per ewe lambing; and
- Mortality - lamb losses from birth to marketing.
Some people are able to market a 200% lamb crop while others are
fortunate to market one lamb per ewe. An old "rule of thumb" is that it usually
takes at least 1.2 lambs marketed per ewe to cover your costs and some years
it has been as high as 1.4. We need to evaluate the productivity of the flock
and determine if we need to improve our genetics and management in order to
market more lambs per ewe. Production records help in this process. Some producers
consistently keep their lamb mortality under 10% while others may exceed 30%.
Here is a key area where great improvement can be made to increase income and
insure profitability. This is also a good time to cull harder than normal and
eliminate the bottom end of the flock from a production standpoint. Do not carry
over ewes that offer potential problems during the lambing season. Half uddered
ewes and ewes that consistently have singles should be on the cull list. This
is also a good time to evaluate ewes that are very old and ewes that stay thin.
If you are going to cull harder, this is a good time to keep back more replacement
ewe lambs from your best producing ewes. If lamb prices are low, then these
replacements are costing you less than when prices are high and have much higher
production potential than the ewes you culled. Again, good production records
are the key. In evaluating the costs of a sheep operation, the highest single
item is usually feed costs, which often make up 60-70% of total costs. This
then should be one of the first areas to evaluate in an attempt to reduce costs.
One way that some producers have cut costs is by lambing later and making maximum
use of pasture and minimizing the use of harvested feeds such as hay, silage,
and grain. This is often done by following an intensive grazing program that
couples rotational grazing with excellent management. A good rotational grazing
program can greatly reduce internal parasite problems which improves performance
and reduces medication costs. Another approach is to make shifts in hay: grain
ratio depending on the costs of these two items. For example, when hay is high
priced compared to grain, one can feed more grain and less hay than normal,
as long as the ration is balanced. If you have considerable variability in hay
quality, be sure to feed your best hay during lactation. This is when the greatest
nutritional demands are placed on the ewe.
Evaluate the costs of the feeds you are using. Can you put together
good rations that are cheaper than the ones you are now using? If so, then do
it. Alternative grain and roughage sources should also be considered. After
a corn field is harvested, the refuse left behind makes good sheep feed and
is a low cost product. How much feed are you using for your ewes? Are you feeding
them too much, not enough, or just right? Except for good milking ewes nursing
triplets and sometimes twins, ewes will usually eat more than they need. Overfeeding
is both costly and unproductive. If you want some good feeding guidelines, then
check in Circular NCR 240 entitled "Management Guidelines for Efficient Sheep
Production." If you do not have a copy, then check with your local Extension
Unit Office or your nearest Extension Center Office.
Marketing is an area where many producers loose potential income.
There is a difference between marketing and just selling. Check your options
and then sell your lambs or wool where you have the best competitive advantage.
Some producers have developed their own niche markets for lamb and/or wool and
have increased their profit by doing so. Market the lambs when they are ready.
Don't put on excess fat that greatly decreases feed efficiency. Even though
the sheep industry has some problems including volatile lamb prices, wellmanaged,
highly-productive ewe flocks have always been profitable. Look for ways to improve
ewe productivity and lower feed costs. Also, remember that sheep production
fits well into a sustainable agriculture program and is a good alternative enterprise
for many farms.