Managing Rising Costs on Sheep Farms – Plan ahead to remain profitable with this year’s lamb crop
April 21, 2022
“With the cost of almost all inputs dramatically rising, it has never been more important to plan to minimise, as much as possible, the affect this has on your business” states CAFRE Beef and Sheep Adviser Gareth Beacom, Enniskillen.
A positive note for sheep farmers is that the price of stock has maintained the highs it has seen of late; whilst this is not as high as last year’s peak, it is well above the 5-year average.
On CAFRE benchmarking figures, average variable costs for sheep enterprises are approximately £60 per ewe for the previous 12 months. With the use of CAFRE’s gross margin calculator we can predict what impact these increased costs are likely to have on businesses. By using the calculator and increasing meal to £350/tonne and fertiliser to £700/tonne the variable costs increase to £85 per ewe. However, for high output flocks selling approximately 1.6 lambs per ewe (including ewe lambs put to the ram) there is potential for an output of around £145/ewe, assuming an average lamb price of £90 throughout the year. This leaves a gross margin of approximately £60 per ewe (not including overheads). Hence there is still scope for sheep to have a profitable margin at the end of the year, providing lambs sold per ewe remains high and overheads are kept in check.
Whilst we cannot predict lamb price for the year ahead, lamb trends from previous yearsgive us some indication of what to expect; there are some sporadic peaks and troughs, but the general trend remains the same. This gives us some scope to plan ahead with our current lamb crop and manage them in a cost effective way to maximise returns.
The first step in planning for this year’s lamb crop is to assess last year’s lamb sales. As a general rule of thumb a typical March lambing flock should aim to have at least 75% of their lambs away by end of September to free up grass for tupping ewes and also to allow for some fields to be closed up and rested for the following spring. Whilst the price of lambs may rise in the late autumn and winter months, lambs grazed after this are competing with the main ewe flock for grass. This will also have a negative effect on grass available the following spring if fields are over grazed and not closed off in time.
Maximising potential from grass
The Agrisearch “grass to lamb” project demonstrates that there is significant room for improvement in terms of grass grown and utilized on sheep farms in Northern Ireland. The project concluded that a well-managed grass system has the potential to supply 90-95% of a sheep flock’s nutritional requirements. The project demonstrated lamb growth rates, drafting patterns and carcass data from both a 4-paddock system and an 8-paddock system and reported an excellent grass utilisation rate of 78% on average from the two systems. Across both systems 100% of the lambs were finished by the end of November with an average carcass weight of 20.2kg and average age at slaughter of 27 weeks.
The recent fertiliser planning report published by AFBI highlighted the months from May – July is when farmers can get the best response and value for money from sowing fertiliser. In general, it is also when a lot of grass is wasted on sheep and beef farms if grazing is not kept under control. Farmers who have adopted a paddock or rotational grazing system often state the ability to close off paddocks and take these out for high quality silage as a massive benefit to the system. Baling this surplus grass can help boost the fodder supply for the wintertime which could be particularly useful this year.
Creep feeding is a debate which crops up annually with BDG members and has many pros and cons. Although meal ration prices have considerably increased there are also many benefits of creep feeding. The main benefits are getting lambs sold earlier, hopefully at a higher price and freeing up grass in the late summer and autumn months. For farmers who may struggle to bulk up silage supplies this year, creep feeding may take the pressure off grazing swards and allow for more fields to be closed off and harvested along with either 1st or 2nd cut silage.
Creep feeding lambs also allows the option to wean lambs earlier, further reducing the pressure on grazing ground. The ewes can be grazed on poorer and more unproductive swards or for cull ewes to be sold earlier to avail of higher cull prices.
Ruminants are more efficient at converting protein into live weight gain when they are younger rather than when they are older; hence the exceptional daily live weight gains that can be seen with creep fed lambs compared to lambs fed intensively in the autumn and winter months.
Research carried out by Teagasc in Athenry (Table 1) demonstrates the extra performance that can be achieved when supplementing lambs at different feed rates and under different grazing heights. The results highlight that creep feeding should not just replace good grassland management, as the highest daily live weight gains are achieved when lambs are offered high quality grass as well meal. The results also show that lambs consumed less creep meal when offered more grass whilst having higher daily live weight gains.
However, Table 1 also shows that the costs of creep feeding at various levels range from £10 – £20 per lamb. Although this doesn’t take into account the extra grass freed up by creep feeding, it still means that a significant number of lambs would need to be sold at a higher price. Hence, it may not be the best option for later born lambs as they would struggle to be finished prior to July; but for lambs born mid-March or earlier there is a reasonable argument for creep feeding if grazing ground is going to be under pressure with rising fertiliser costs.
A mixed approach may be the best option for some farmers i.e., targeting a couple of batches for creep feeding such as early forward lambs or lambs already achieving a high daily live weight gain. Or lambs on ewes targeted for culling in order to get these ewes off the grazing platform earlier and avail of good prices for them in addition.
Creep grazing via a creep gate can deliver similar levels of performance to creep feeding without the additional cost of creep feed. It has been shown to improve weaning weights by up to 2kg. It can also be coupled with creep feeding to significantly boost performance by offering lambs meal in troughs as well as the best possible grass available. This has the added advantage of being able to move troughs easier than a creep feeder which helps reduce the build-up of infection and will also be easier when moving to a new paddock. However, this does require good fences and won’t be possible in all farms, i.e., farms with fragmented ground etc.
If reseeding is needed, then incorporating a forage crop such as rape or tyfon can give another option for finishing lambs in the summer months. These can be sown either on their own or under sown along with a grass reseed to provide a cost effective alternative for finishing lambs.
While growth rates will not be significantly higher than you would expect from high quality grazing, forage crops are generally dense in nutrients, with the leaves high in protein and the roots high in energy. If a good establishment is achieved then a high dry matter yield per ha is possible, allowing many lambs to be finished on a small area.
“Considering the dramatic increase in all costs, planning for this year’s lamb crop is vital in order to finish lambs in a cost-effective way and also to have sufficient grazing and silage supplies for ewes later on in the year. Everyone’s situation will differ depending on stocking density and dependency on inputs. Larger producers can minimise risk by availing of several finishing options”.