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Can sheep be profitable?

By Staff | Feb 20, 2009

SANBORN – Speaking to 30 sheep producers assembled in Sanborn for a Northwest Iowa Sheep Producers Association-sponsored event, Dr. David L. Thomas, from the University of Wisconsin posed the question “Can you make money raising sheep?”

Thomas took a critical look at the sheep business. He encouraged anyone involved in the sheep industry or wanting to look at the sheep industry to sit down and compute costs onto a spreadsheet. The best one he has found is at:

www.sheepandgoat.com/

economic.html.

“Susan Shoenian of the University of Maryland has the best sheep Web site,” said Thomas. “She does a good job of bringing information on goats and sheep.”

In putting this budget together, Thomas looked at what it costs to get into the sheep business. He assumed the operation was to produce market lambs with 100 ewes, requiring three rams. There are 25 acres of improved pasture that would support four ewes and their lambs per acre. The ewes and lambs would graze six months of the year. All supplementing feed would have to be purchased.

A significant start up cost is the ewes, costing primarily in the range of $100 to $250 per head.

Thomas chose $175 per head as his figure. The rams cost him $400 per head picked from a normal range of $250 to $500 per head.

Fencing was also figured in. Those costs varied greatly depending upon quality of existing fences. Materials for a sheep-tight perimeter fence around 25 acres will cost $1 per foot or around $4,200 total. Some temporary fencing should be included bringing the total cost to $5,000.

“If you want the ultimate, deluxe in corrals and working pens then expect to pay $3,700,” Thomas said. However, he added, less fancy facilities will work for about $40 per ewe.

Thomas assumed the pasture would need complete renovation and seed bed preparation. The cost of planting new legume grass pastures would be hired out, costing $170. That cost could be cut to one-third or one-half if fertilization was all that was needed.

A start up operation requires shearing equipment, drenching guns, foot trimming shears, lambing jugs, lamb working equipment, such costs added $1,000 or another $10 per ewe. By the time Thomas was done adding the costs, it came to a start up cost of $31,500 or $311.50 per ewe.

Annual operating costs also needed to be considered. There was the supplemental feed for lambs, ewes and rams. The pasture needed to be maintained, a health program incorporated so that the total operating costs added up to $17,081 or $170.81 per ewe.

According to Thomas, one can expect those 100 ewes to raise 160 lambs each year. The producer needs to save 20 percent for replacement ewes, that leaves 140 lambs for market. In a normal year, three ewes die, leaving 17 cull ewes to sell. A ram or two need replacing each year.

Income from a sheep/lamb operation includes wool, wool LDP on shorn wool and unshorn lambs, culled ewes and rams and 140 head of market lambs weighing 130 pounds sold at 95 cents per cwt.

Income totaled $19,009 or $190 per ewe. This created a pretty bleak picture, showing roughly a $20 profit over the cost of producing lambs, the first year.

Questions and objections came from the audience. Many felt the pasture could support more ewes and lambs, shearing equipment and shearing costs were replicated. They felt there were ways to reduce costs and these figures were too negative.

Thomas agreed and spent some time showing ways to reduce expenses and increase income.

“The place to start is with feeding costs,” said Thomas. “Feed is the largest single operating expense accounting for 43 percent of the budget. Reducing feed costs should be a top priority.”

Thomas cited studies that showed feeding a less quality hay had no effect on ewe/lamb health, but just about doubled the profit per ewe with this simple change. Sheep can be fed good quality grass hay during winter housing before the lambing season.

Good grass hay (RFV 150-170) has the same energy as alfalfa and alfalfa-grass hay with 9-13 percent protein.

Be creative, said Thomas. Use co-products. He pointed to work that ISU Dr. Dan Morrical has done. Rations using corn stalks, condensed distillers solubles, soybean hulls all work for sheep.

Dennis DeWitt, Iowa State University livestock specialist, has seen an increase in requests for ration summaries.

Another way to reduce feed costs is to reduce feed wastage by using good feeders. A big bale feeder can reduce hay wastage by as much as 40 percent.

The average lamb crop in Iowa is 1.41 per ewe. Thomas said some producers have increased their lamb production to two ewes per lamb. That includes ewe lambs for saving for replacements. More lambs to sell has the same effect of reducing feed costs. It equals more profit, Thomas stated.

Contact Renae Vander Schaaf by e-mail at renaefarmnews@gmail.com.

SIDEBAR

Practical ideas for profitable sheep production

Dan Morrical, Iowa State University sheep specialist, offered the following tips as realistic approaches to being more profitable

These include:

  • Add more grazing days.
  • Store expensive hay inside.
  • Plant grass and fence posts; let the neighbors grow corn.
  • Fertilize pastures.
  • Be your own veterinarian.
  • Sell direct.
  • New consumers want small lambs.
  • Join a cooperative, sell on yield and grade basis.
  • Improve genetics – multiple births gets more pound per ewe sold.
  • Utilize the National Sheep Improvement Program.
  • Choose a different lambing season, warmer weather lambing requires less labor.
  • Self-feed soy hulls, a high energy safe feed source.
  • Let sheep walk to the feed instead of you walking to the sheep.
  • Sheep manure has value.
  • Rent out sheep for grazing conservation areas.

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