Sheep Records: The Key to Profitability
Good records allow producers to identify high performing animals as well as low-performers that should be culled.
Choosing the type of records to keep for your sheep operation initially starts with identifying what influences the profitability of the flock. Once you determine what affects profitability, you can start collecting records that help you make better-informed decisions. These decisions might include tasks such as selecting the best-performing sheep in your flock, identifying sheep that should be culled, or identifying expenses that could be reduced.
A research study at North Dakota State University (NDSU), "Critical Control Points for Profitability in Sheep Production," identified four key points that determine net profit for sheep operations: sufficient volume of production to be efficient, low unit cost of production, adding value to the lambs by feeding them to a specified weight, and labor efficiency. So, the question now is what types of records a producer should keep to address these profitability points?
When I consider production efficiency, several key criteria come to mind. For rams, they should be more than just fast-growing, muscular, and structurally correct. Any ram needs to be reproductively sound. Records that will prove his merit would include the percentage of ewes he settled in two heat cycles, the growth and performance of his offspring as lambs, and the performance of those lambs as sires and dams. For ewes, I might look at the total weaning weight of her lambs at a given age, as well as post-weaning growth, muscling, and structural correctness. To obtain this information, producers should maintain detailed lambing records, including birth date, sire, dam, sex, type of birth and rearing, and birth weight. Producers should also collect weaning weights and post-weaning weights. Additionally, ultrasound scan data for the loin eye area and/or depth, plus fat thickness, is very useful for evaluating production parameters.
To address a sufficient volume of production to be efficient, we need to realize that not only do we have certain expectations of each individual ewe and ram in the flock, but we also need to lamb out a large enough flock that we can spread the expenses across a larger number of ewes. Some expenses are fixed regardless of the number of sheep on the farm, while others are flexible and will vary based on the number of sheep. An example of a fixed expense would be a mortgage payment. A flexible expense example would be feed. The mortgage cost stays the same, but the feed cost increases as the number of sheep increases.
Operation expenses will have a significant impact on the overall profitability of an operation. The NDSU research study examined net profit over several years, and its data suggest that producers should spend time closely monitoring, measuring, and controlling operational expenses. Feed costs are typically one of the most significant expenses in an operation, so practices such as sheep selection to decrease grain consumption (an expensive feed resource) and methods to increase and improve pasture production can make a difference in the bottom line at the end of the year.
A low unit cost of production takes into account two aspects of the operation: total production and total costs. You can consider your unit cost of production in several ways, depending on the product that you are selling. For producers selling feeder lambs, you might look at the cost to raise a lamb to weaning age. If you are considering selling market lambs, consider the cost per pound of gain. For breeding stock, consider the costs associated with raising a replacement ewe.
Adding value to lambs by feeding them out would involve a closer examination of the cost to finish a lamb to a specified weight compared to the value of selling that lamb at weaning. Low-cost weight gains on pasture could be compared against feeding efficiencies (pounds of feed needed for a pound of gain) in a feedlot. Pasture growth rates will be much slower, and thus lambs take longer to reach market weight compared to fast-growing feedlot lambs who are consuming more expensive grain rations. For the eastern lamb market, lamb value may focus more closely on marketing milk-fed lambs for ethnic holidays.
Labor efficiency can be largely dependent on the operation facilities. Obviously, there is a cost to improving facilities, but that cost can be justified if labor cost is reduced by more than the cost of the improvement. For example, handling small square bales can be very time-consuming. By purchasing a round bale feeder and switching to large bales, significant savings can be achieved in the time spent feeding forages to the sheep. However, if this switch also requires investing in new equipment to handle the larger bales, the lower labor cost may not justify the additional expense.
A key to any record-keeping system is to choose a method that is both easy to use and easily accessible. Whether you are using a handwritten system or a sophisticated computer program, they need to be kept up to date to make the best use of the records. Income and expense records can be very valuable when compared over several years.
Whenever you start a new calendar year, are there ways you can do a better job of keeping records for your operation? Do you need to become more efficient at keeping records? Do you need to keep more detailed records? Or, do you need to develop a new system for keeping those records? Plan now to be more profitable!
