Managing a productive and profitable prime lamb system
Jonathon Tocker, Farming Systems Economist, Agriculture Victoria, Hamilton
Farming a sheep enterprise involves managing many interconnected components:
- cash flow.
If one part of the farm is changed or performing poorly, other components of the business and overall farm performance are also affected. Every farm business has different resources available and every farm manager has different skills, goals and preferences for risk.
Farm management is about trying to get the balance between the various components 'right', subject to the resources that are available and individual circumstances, to generate profits and build wealth to achieve business and personal goals. As a result, the question is often asked: What are the important measures to monitor and what are the key production aspects to focus on to ensure a successful prime lamb system?
Generating profits to achieve goals and a return on investment is a key focus for most farmers. In a farm business, profit is generally determined by how much is produced, the cost to produce it and the price received. Pasture is usually the cheapest source of feed for a sheep enterprise, so the most profitable production will occur when pasture is effectively utilised. This involves setting up the production system to match seasonal pasture supply with animal feed demand, combined with the strategic use of forage and grain supplements. Because the pattern for pasture growth is generally spring dominant, some level of supplementation will be required to either maintain ewes or finish lambs.
Analysis of top performing prime lamb systems (and research into sheep enterprises) identifies five key characteristics for optimising production and profit:
- stocking rate, measured as number of ewes joined per hectare
- the number of lambs produced per ewe joined — affected by scanning rate and survival to weaning
- lamb growth rate and the weight of the lamb sold
- the weight and condition of the ewes throughout the season
- managing labour, costs and risk.
(Jackson et al. 2014, McEachern and Brown 2014, Tocker 2016, de Fegely 2017, McEachern 2017, Tocker 2017)
Balancing these characteristics is complex. First, the target weight of lamb being produced, the time required to get them to weight and when they are planned to be turned off needs to be established. A lamb sold at 30 kilograms carcass weight will require more feed and time on-farm than a 20 kilogram lamb. This influences how many ewes can be carried and the ability to maintain ewe condition for joining and lambing. Often from an economic perspective, focusing on selling the heaviest lambs at the highest price, aiming for the highest weaning percentage, or farming at a very high stocking rate can come at a cost. In other words, the cost to produce that extra kilogram of meat may be greater than the extra income received.
It has been observed that top performing prime lamb systems aim to finish the majority of lambs on spring pasture, and depending on location and season, some also use forage crops or grain. Lambs are ideally grown at 250 grams per head per day or better, and aim to be sold at 20 to 24 kilograms carcass weight. These top systems ensure that ewes are at suitable condition score for joining and lambing, to achieve an average lamb marking rate of between 120 to 140 per cent, sometimes higher. Ultimately each producer needs to analyse the numbers and set targets for their own prime lamb system, according to the resources under management and the target market.
But the real test is putting all of this into practice. A recent presentation by de Fegely (2017), proposed three attributes for a productive and profitable sheep enterprise:
- Productive pastures — have good soil fertility and grow, for example, good perennial ryegrass and sub-clover pastures (or equivalent for your farm). Use rotational grazing and sub-division to control pasture quality. Use forage crops and supplementary feeding as part of seasonal risk management, subject to a cost-benefit analysis. For example, do you feed ewes, or lambs, or sell lambs early?
- Top genetics — to utilise pasture as efficiently as possible to turn it into meat and wool. Evaluate breeding values for fertility, milk production, growth rate and fat.
- Good management — manage ewe condition for joining and lambing, for example, weaning early to get ewes back into condition for autumn. Pregnancy scanning, to feed ewes appropriately. Manage lamb survival at lambing (mob size, feeding and monitoring) and lamb growth rates until sale. Use feed budgeting to plan ahead. Finally, utilise labour and time efficiently, and monitor expenditure — sometimes you need to spend money to make money, sometimes you can save money. Analyse the economics of every option.