Hair Sheep: Enhancing Farm Profitability

1. Hair Sheep:Enhancing Farm Profitability Scott Jerrell Extension Agent, Agriculture Scott County, Virginia

2. Locations Served by the SCHSA

3. Marketing Opportunities • Association is Driven by Volunteer Members • Marketing Options • Food City Partnership • Hair Sheep Faire • Custom Meat Processing • Private Treaty / Livestock Markets

4. 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.

5. 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.

6. Food City Partnership • Demand for 10,000 head per year

7. Lamb Carcass Quality Evaluation Value Determination Scott Jerrell, Extension Agent • Yield 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. • 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. Yield Grade 1 • 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. • 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. Yield Grade 5

9. Weekly Prices New Holland vs. Food City Marketing Scenarios New Holland Market ( 112.5 # animal) 2009 average price (11/03/2009) = $ 1.24 112.5 - 6% Drift = 105.75 105.75 # animal * $1.24 = $ 131.13 $131.13 - $4.25 (Marketing Fee) = $ 126.88 $126.88 - $7.00 (Haul Fee) = $ 119.88 119.88 / 112.5 # live wt. = $ 1.07 / # Food City Market (112.5 # animal) $3.20 per pound chilled carcass 45% average dress weight 112.5 * 0.45 = 50.6 # carcass 50.6 # - 2% chilling loss = 49.6# 49.6 # * $3.20/# = $158.76 $158.76 - $32.00 (Fees) = $126.76 $126.76 / 112.5 # live wt. = $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 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 $35.20

11. Market vs. Food City Comparison Year Incentive $0.20 $0.18 $0.21 $0.17 • 2006 • 2007 • 2008 • 2009

12. Economics of Sheep Production

13. Variables • Input Cost (Feed, Fertilizer, Seed, Fuel) • Liability (Assumed and Actual) • Animal Growth • Environmental Conditions (Drought, Flooding) • Reduces potential profits and increases stress.

14. Coping with Variables • Farm Smarter • Shop Prices • Minimize Losses • Optimize Growth and Performance • Maximize Profits

15. Farm Smarter • Soil Sample • Simple way to determine exactly what fertilizer is needed.

16. 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

17. Pasture Management • Maximize manures Annual manure production per AU = 7.24 T.

18. Pasture Management • 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.

19. Shop Prices • 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.

20. Minimize Losses • 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

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

22. Maximize Profits • 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.

23. Scrutinizing Feed Costs • Evaluate per Unit Cost: • Per pound of nutrient more closely estimates actual costs when comparing different feeds.

24. Feeds for Sheep Protein 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. • Made up of complex combinations of amino acids and are essential for animal growth, production and reproduction.

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

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

28. ForagesForage 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

29. Current Feed Prices

30. Feed Price Comparison • 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?

31. Feed Cost Scenario

32. Feed Cost Scenario Daily Ration Cost $0.24

33. Feed Cost Scenario • 66 pound lamb • $ 0.24 per day @ 0.65 #/day gain • 34 # in 52 days • Total cost to get to 100 #

34. Feed Cost Scenario • 66 pound lamb • $ 0.26 per day @ 0.65 #/day gain • 34 # in 52 days • Total cost to get to 100 # $12.48

35. Carcass Enhancement Breeding Stock Development Rams Ewes Carcass Trait Selection Muscling Frame ADG

36. Member Scenario • 83 ewe farm • 173 lambs • 110 market lambs • 63 ewe lambs

37. Member Scenario • 110 market lambs • $15,500 after fees • 63 ewe lambs • 4 @ sale $1,200 • 40 @ $200 • 19 replacement ewe lambs Income from Sales: $24,700

38. Member Scenario • Feed Cost (Including Dog Feed) • $7,500 • Medications • $800 • Vet Fees • $300 • Misc • $400 Total Clear Money: $17,900

39. Member Scenario Return per Lamb: $116.23

40. Closing • 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