• Isabel Vialoux

Profit based on lamb growth

Updated: Feb 2

If lambs were grown at greater daily liveweight gains and then finished earlier (either sold to store or to a lamb processor), then in theory, they would eat less pasture and cost less overall to finish. However, depending on the pasture supply and lambing date, this may not be the case for all regions in New Zealand, as increases in performance can affect farm expenses, which affects overall profitability.


Profitability is ultimately income minus expenses, therefore, lower expenses for the same income will result in a greater profit. Conversely, higher expenses for the same income will result in lower profit.


This study looks at the impact of lamb growth on farm profitability in Otago, Gisborne and Northland.


Key Points:

  1. Farm profit had a different response to change in lamb weaning weight and post-weaning lamb growth rate for all three regions.

  2. In the temperate region (Northland), the extreme ends of the changes in lamb weaning weight and post-weaning growth rate resulted in the greatest profit.

  3. Bigger is not necessarily better and matching animal performance and feed supply is potentially more important than improving animal performance.


A whole-farm-system model was used to assess the impact of increasing lamb weaning weight and post-weaning growth rate on farm profit and stock class selection of three farms from different regions of New Zealand (Otago, Gisborne and Northland).


That means that the model will adjust pasture cover and stock classes, both sheep and beef, to select the most profitable combination based on the weaning weight and post-weaning growth rate.


Lamb weaning weight for each model was increased in 1-kg increments up to 6 kg from the current farm performance or "base" values that are given in Table 1 below.


Table 1. The base parameters of each region for the model.

The lambing dates for the regions, Otago, Gisborne and Northland were 8th October, 12th September and 17th August respectively. The pregnancy scanning percentage was greatest in Otago (179%), and least in Northland (171%).



In the following graphs, there is a base weaning weight for each region presented in kg and the growth rate is moving from a base post-weaning growth rate (unfortunately, this was not presented in the paper). These graphs are interpreted from 3D graphs that can be found in the paper linked at the bottom of this summary.


The first graph is the farm earnings before interest, tax, depreciation and amortization (in $ 000's) for the Otago model. Increasing the lamb weaning weight from 27 to 30 to 33kg (blue, purple and grey respectively) within each post-weaning growth rate on the Otago farm shown in Graph 1, did not increase the farm earnings.


The highest weaning weight of 33kg (grey bars) at either post-weaning growth rate of 50g/day below base (-50g/day), base (0) or 50g/day above base growth rate (+50g/day) had the lowest farm earnings. This is a result of a greater feed demand during summer and autumn for the lambs than the base system at the same feed supply. Therefore, there must be less breeding ewes and more breeding cattle to allow for more feed to be allocated to the growing stock.


The greatest farm earnings was at a weaning weight of 27kg (blue bars) and an increased growth rate of 50g/day above the base growth rate ($650,000).


The model changed the number of breeding stock on farm when the growth rates were increased (+50g/day). There were more breeding ewes, less breeding cattle and store lambs were purchased for the Otago scenario.



Graph 1. Effect of lamb growth rates on farm earnings before interest, tax, depreciation and amortization for a sheep and beef farm modelled in Otago.



On the Gisborne farm presented in graph 2 below, increasing lamb weaning weight above the base weight of 26 kg increased farm earnings for all weaning weights.


There were no changes to stock classes when the lamb weaning weight was increased in the base growth rate model. This means that just having a greater weaning weight with the same post-weaning growth weight, the stock numbers would remain the same but with a greater farm income.


When the lamb growth rates were decreased (-50g/day) the model switched system with more cows and less sheep and when the growth rate increased (+50g/day), the breeding cow numbers declined, with a huge increase in farm earnings.


Graph 2. Effect of lamb growth rates on farm earnings before interest, tax, depreciation and amortization for a sheep and beef farm modelled in Gisborne.

The greatest farm earning in the Northland models occurred at the lowest weaning weight, at a lower post-weaning growth rate (-50g/day) than the base model. This was a result of the model reducing breeding ewe and cow numbers and increasing the number of store lambs purchased. This increased the efficiency of the system by reducing maintenance feed costs so there was more feed for growing stock.


Graph 3. Effect of lamb growth rates on farm earnings before interest, tax, depreciation and amortization for a sheep and beef farm modelled in Northland.

The outcomes to these models show a trend in profit when lamb weaning weights and growth rates are manipulated. This demonstrates the interactions and trade-offs between feed supply and lamb growth rate on farm, and highlights that increasing lamb liveweight gain does not necessarily equate to increased profit. If other factors were changed, then there could be numerous other outcomes to the profit.


These models show that bigger is not necessarily better and matching animal performance and feed supply is potentially more important than improving animal performance.


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Paper:

Thompson B, Stevens D, Scobie D & O'Connel D (2016). The impact of lamb growth rate pre- and postweaning on farm profitability in three geo-climatic regions. In Proceedings of the New Zealand Society of Animal Production. 76: 132-136.


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The two editors, Isabel Vialoux and Rhiannon Handcock are PhD students/employees at Massey University.

This blog represents the views and opinions of Isabel and Rhiannon, not Massey University.

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