Hair Sheep:Enhancing Farm Profitability

Scott JerrellExtension Agent, AgricultureScott County, Virginia

Locations Served by the SCHSA

Marketing Opportunities

• Association is Driven by Volunteer Members

• Marketing Options– Food City Partnership– Hair Sheep Faire– Custom Meat Processing– Private Treaty / Livestock Markets

Food City Partnership

• Association members asked for opportunity to market lamb in local grocery stores.

• A meeting was arranged with Food City representatives.

• Food City agreed to a 6 month trial period, and has purchased consistently for almost 3 years.

• Demand is extremely good, need more producers for consistent/steady supply.

Food City Partnership

• Pay $3.20 per pound on weight of chilled carcass after harvest.

• Rewards good producers that provides quality animals with little waste.

• Harvest and packaging occurs at Bristol, VA and Greeneville, TN.

• Demand for 10,000 head per year

Food City Partnership

Year Head Total Pounds

Avg. Price

Carcass Wt. Avg.

Total $ Received

2005 1,729 90,545 $ 3.00 52 $ 271,635

2006 3,691 116,000 $ 3.00 52 $ 348,000

2007 4,213 226,983 $ 3.00 54 $ 680,949

2008 4,827 276,800 $ 3.20 57 $885,760

2009 4,250 242,257 $ 3.20 57 $ 775,222

TO DATE 18,710 952,585 - - $ 2,961,566

Lamb Carcass Quality EvaluationLamb Carcass Quality EvaluationValue Determination

Scott Jerrell, Extension AgentYield Grade

•Grade 1 (highest quality) to Grade 5 (lowest quality)

•Largest factor affecting value of lamb carcass.

•Based on yield of boneless, closely trimmed retail cuts of meat from the leg, loin, rack (rib), and shoulder.

•External Fat Adjustment

•Rib eye (Loin) Area

•Leg Score

•Kidney, Pelvic, and Heart (KPH) Fat Percentage.

Carcass Weight

•Need to look at consistency and quality.

•Must be adequately finished with 0.1 to 0.2 inches of external fat.

•Important to the quality of the meat – insures against excessive drying of the carcass.

•Excessive fat leads to lowered quality and overall carcass weight due to trim losses.

Quality Grade

•Prime, Choice, Good, Utility

•Prime is highest, most desirable – Choice is close second (less marbling)

•These grades are determined based on flank streaking, conformation (specifically leg conformation), maturity, kind and class, firmness, and finishing.

Carcass Maturity

•Maturity in lambs is determined by evaluating lean color and texture, rib bones and break joints.

•Carcasses are classified as lamb (young lamb or older lamb), yearling mutton and mutton.

•Lamb maturity carcasses have break joints on both shanks, slightly wide and moderately flat rib bones and a light red, fine textured lean.

Yield Grade 1

Yield Grade 5

Marketing Scenarios

New Holland Market ( 112.5 # animal)New Holland Market ( 112.5 # animal)2009 average price (11/03/2009) = $ 2009 average price (11/03/2009) = $ 1.24

112.5 - 6% Drift = 105.75112.5 - 6% Drift = 105.75105.75 # animal * $1.24 = $ 131.13105.75 # animal * $1.24 = $ 131.13

$131.13 - $4.25 (Marketing Fee) =$131.13 - $4.25 (Marketing Fee) = $ 126.88$126.88 - $7.00 (Haul Fee) = $ 119.88$126.88 - $7.00 (Haul Fee) = $ 119.88119.88 / 112.5 # live wt. = 119.88 / 112.5 # live wt. = $ 1.07 / #$ 1.07 / #

Food City Market (112.5 # animal)Food City Market (112.5 # animal)$3.20 per pound chilled carcass$3.20 per pound chilled carcass

45% average dress weight45% average dress weight112.5 * 0.45 = 50.6 # carcass112.5 * 0.45 = 50.6 # carcass

50.6 # - 2% chilling loss = 49.6#50.6 # - 2% chilling loss = 49.6#49.6 # * $3.20/# = $158.7649.6 # * $3.20/# = $158.76

$158.76 - $32.00 (Fees) = $126.76$158.76 - $32.00 (Fees) = $126.76$126.76 / 112.5 # live wt. = $126.76 / 112.5 # live wt. = $1.13 / #$1.13 / #

Large vs. Small Lambs for Food City

100 # animal

45% average dressing weight

100 * 0.45 = 45 # carcass

45 # -2% chilling loss = 44 #

44 # * $ 3.20 = $140.80

$ 140.80 – $ 32.00 (Fees) =

$108.80

125 # animal

45% average dressing weight

125 * 0.45 = 56.25 # carcass

56 # - 2% chilling loss = 55 #

55 # * $ 3.20 = $ 176.00

$ 176.00 – $ 32.00 (Fees) =

$ 144.00

$35.20

Weekly Prices

New Holland vs. Food City

Feed Cost per Pound Gain

5 pounds feed = 1 pound gain

$265 / Ton = $ 0.133 per pound

$ 0.6625 per pound of gain

25 pounds * $0.6625 = $16.56

Market vs. Food City Comparison

Year

• 2006 • 2007 • 2008 • 2009

Incentive

• $0.20• $0.18• $0.21• $0.17

Economics of Sheep Production

• Input Cost (Feed, Fertilizer, Seed, Fuel)• Liability (Assumed and Actual)• Animal Growth• Environmental Conditions (Drought, Flooding)

• Reduces potential profits and increases stress.

Variables

• Farm Smarter• Shop Prices• Minimize Losses• Optimize Growth and Performance• Maximize Profits

Coping with Variables

• Soil Sample– Simple way to determine exactly what fertilizer is

needed.

Farm Smarter

• Normal “pasture” fertilization rate = 300 #/A 19-19-19 @ $1,000 per Ton: $150/A

• “Average” Scott County pasture soil sample = L – Phosphorous, M – Potassium would require 300 # 8-24-24 at a cost of $800 per Ton: $120/A

TOTAL SAVINGS OF $30 PER ACRE

Farm Smarter

• Maximize manures

Pasture Management

Annual manure production per AU = 7.24 T.

• High Quality Grasses and Legumes– Orchardgrass, Perennial Ryegrass, Fescue– Clovers (Red, White, Crimson), S. Lespedeza, H.

Vetch

• Rotational Grazing– Even in drought, rotational grazing will extend

grazing season.

Pasture Management

• FEED– $10.00 difference per ton can make you $1.20 in

profits from feeder lambs.– 10 lambs per acre – increased profits of $12.00

per acre.– 40 lambs … you get the picture.

Shop Prices

• Reduce unnecessary expenditures– Open ewes, Extra Rams, Cull Lambs

• Optimum Gain for Minimum Price• Pasture vs. Grain Finish or Combo • Evaluate Marketing Season• Re-evaluate Lambing Times

Minimize Losses

• Creep Feeding – Increase Weaning Weights by 10-20%

• Ionophores (ie/ Bovatec) – Increase feed efficiency 3-5 %

• Feed Proper Feed, Minimize Waste • Hand Feed vs. Self Feeder• Minerals and Vitamins

Optimize Growth and Performance

Lamb Nutrition and Feeding, Dan Morrical, Iowa State University, http://www.ans.iastate.edu/faculty/morrical/acc/sheep/lambfeeding.pdf

• Know your costs of gain.• Figure feed costs on per pound of gain, not

per pound of feed.• Look for cheapest protein and energy sources.• Analyze cheaper ways to achieve gain.

Maximize Profits

• Evaluate per Unit Cost:– Per pound of nutrient more closely estimates

actual costs when comparing different feeds.

Scrutinizing Feed Costs

Feeds for Sheep

Protein• Made up of complex

combinations of amino acids and are essential for animal growth, production and reproduction.

Energy• A nutrient essential for

maintenance, growth, production and reproduction. Energy is required in larger amounts than any other nutrient except water, and is often the limiting factor in livestock production.

Protein Feeds

% TDN = % total digestible nutrients; NEm = net energy for maintenance; NEg = net energy for gain; % CP = % crude protein; Ca = calcium; P = phosphorous

Energy Feeds

% TDN = % total digestible nutrients; NEm = net energy for maintenance; NEg = net energy for gain; % CP = % crude protein; Ca = calcium; P = phosphorous

ForagesForage Testing is only way to know nutritional content.Forage Testing is only way to know nutritional content.

% TDN = % total digestible nutrients; NEm = net energy for maintenance; NEg = net energy for gain; % CP = % crude protein; Ca = calcium; P = phosphorous

Current Feed Prices

• 66 pound lamb– Requires 0.42 # CP and 2.1 # TDN per day.– If the animal consumes 2 # hay per day, it will gain

0.21 # CP and 1.2 # TDN (based on 10.5% CP and 60% TDN state average for grass hay).

– The lamb is still deficient 0.21 # CP and 0.9 # TDN – what is the most cost effective alternatives?

Feed Price Comparison

Feed Cost Scenario

Feed Cost Scenario

•66 pound lamb–$ 0.24 per day @ 0.65 #/day gain• 34 # in 52 days• Total cost to get to 100 #

Feed Cost Scenario

•66 pound lamb–$ 0.26 per day @ 0.65 #/day gain• 34 # in 52 days• Total cost to get to 100 #

Feed Cost Scenario

$12.48

Carcass Enhancement

• Breeding Stock Development– Rams– Ewes

• Carcass Trait Selection– Muscling– Frame– ADG

• 83 ewe farm– 173 lambs• 110 market lambs• 63 ewe lambs

Member Scenario

• 110 market lambs– $15,500 after fees

• 63 ewe lambs– 4 @ sale $1,200– 40 @ $200– 19 replacement ewe lambs

Member Scenario

• Feed Cost (Including Dog Feed)– $7,500

• Medications– $800

• Vet Fees– $300

• Misc– $400

Member Scenario

Member Scenario

• Prices are a factor– Market at most desirable times and place– Cut costs wherever you can– Optimization may yield better profits than

maximization– Work smarter, not harder

Closing