Region: National
How much more money would I make?
Date: 2011-01-13 | Category: Sheep & Beef
More than you might think.
- Sheep and beef operations vary widely, with many stock policies.
- To demonstrate the financial benefits we have used examples for breeding ewes and lamb finishing separately.
- These are the properties where additional pasture renewal, as advocated in this publication, has good potential.
- High, hill and back country enterprises producing store cattle and lambs do not typically have a lot of land easily covered by a tractor and, for them, the more practicable avenue for significant pasture improvement is most likely to be by aerial oversowing.
- The simplest way of expressing the benefits to be gained by sheep farmers in our target sector from superior pasture are through:
- the ability to run more breeding ewes, and/or
- the ability to finish lambs faster, creating the opportunity to finish additional trading lambs [mostly applicable to summer-moist regions]
More breeding ewes
To express the first of these examples, we use the tried and true measure of the gross margin per ewe.
| Assumptions |
| The modern breeding ewe |
= 1.2 stock units |
| With an annual feed requirement |
660 kg DM [1 s.u. = 550] |
| Gross margin per ewe [See Appendix 2] |
= $ 84 |
| Increased pasture production from renewal |
3.3 tonnes/ ha per year [3-6 is typical] |
| So... |
|
| Extra 3,300 kg DM annually will support |
5 additional ewes [3300/660] = $420/ha [$84 x 5] |
|
Finish extra lambs
This benefit will not always be available to farmers in summer-dry regions but the opportunity will present itself in some seasons - certainly more often than it would if pasture renewal were not undertaken at all!
| Assumptions |
| Average lamb growth rate on old pasture |
120g/day |
| Average lamb growth rate on new pasture |
200g/day |
| Stocking rate |
20 lambs/hectare |
| Finished lamb value /kg liveweight |
$2.00 |
| Starting liveweight |
24kg |
| Target finishing liveweight |
36kg |
| Therefore target liveweight gain |
12kg [12,000g] |
| So: faster finishing |
|
| Finishing on old pasture takes |
100 days [12,000g @ 120g/days] |
| Finishing on new pasture takes |
60 days [12,000g @200g/days] |
| So: more finishing capacity |
|
| The faster growth rate frees up an additional 40 days of grazing. |
| With 15 lambs/ha average at a gross margin of $20/head for 3 trades a year = $900/ha/year |
| See Appendix 3 for the lamb gross margin |
|
|
Remember: This is one example of what could be achieved. This does not take into account the additional benefit of improved seasonality of dry matter production of new cultivars.
Note: To assist feeding stock while new pasture is establishing, an allowance has been made to buy in 1 t DM silage at 30c/kg DM = $300/ha. This may be necessary if feed supply is restricted at this time.
Appendix 2.
Breeding ewe gross margin assumptions
| Per Ewe |
$ [ex GST] |
| Lambing % |
140% |
| Replacements kept |
28% |
| Lamb income |
1.1 lambs @ $75 = $82.50 |
| Cull ewe income |
20% ewes @ $60 = $12.00 |
| Wool income |
5.0kg wool/ewe $3.50 = $17.50 |
| Ram purchases |
25% of rams @ $700 = -$2.19 |
| Ewe income less purchases |
$109.81 |
| Less direct costs: |
|
| Freight |
$1.33 per head = $1.33 |
| Animal health |
$3.50 per sheep su = $5.00 |
| Shearing |
$3 per head = $8.00 |
| Interest |
8% on capital $11.48 |
| Total direct costs |
$25.81 |
| Gross Margin |
$84.00 |
|
Appendix 3.
Lamb gross margin assumptions
| Per lamb |
|
$ [ex GST] |
| Lamb meat 30 April sale |
38kg LWT
44% yield
16.72kg CCWT |
|
| Schedule price |
$5.60/kg CCWT |
$93.63 |
| Wool |
1.3kg |
|
| Wool price |
$3.50/kg |
|
| Wool income |
|
$4.55 |
| Total lamb income |
|
$98.18 |
| Adjustment for deaths: |
1.0% |
$97.20 |
| Less: |
|
|
| Lamb purchase 21 March |
30kg LWT |
$70.50 |
| Price/kg LWT |
$2.35/kg LWT |
|
| Less direct costs: |
|
|
| Freight |
$1.38 |
|
| Animal health |
$1.50 |
|
| Shearing |
$3.00 |
|
| Interest |
$0.82 |
|
| Total direct costs |
|
$6.70 |
| Gross Margin |
|
$20.00 |
|
Important Note:
These appendices provide indicative conservative figures, which will vary between situations. Calculators for both dairy and sheep & beef farms are available online at www.pasturerenewal.org.nz, please use these to calculate the specific costs for your own individual situation.
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