Will finishing merino lambs in a feedlot pay?

Making More From Sheep - Geoff Duddy

Type: PDF
Knowledge level: Intermediate

Farm Table says:

Some handy starting assumptions and sensitivity analysis that shows the range of profit scenarios from feedlotting Merino lambs. The analysis shows profit ranging from -$6.88/hd to +$14.55/hd.

Geoff Duddy states that feedlotting can be used a useful management tool, but likely returns and possible alternatives need to be considered before committing to a feedlot program.

He asks the question: with prices for prime lambs at seasonal highs, predicted winter lamb supply low and contracts available for well-finished merino lambs, is it currently profitable to finish these lambs within a feedlot?

Duddy uses the Sheep CRC Calculator to perform an analysis with the following assumptions:

  • 40kg Merino wether lambs, short wool, starting value $65
  • Target weights of 48 and 54kg (21 and 24kg carcass weight assuming a 45% dress respectively).
  • Gross returns of $105.36 and $117.38 based on $4.60/kg HSCW
  • No shearing costs or wool income were included.
  • Lambs vaccinated, drenched, bred on-farm with $5 transport cost to slaughter and 5% sale commission
  • Cereal grain-based ration with cereal hay and additives providing 11 MJ per kg DM and 12% crude protein
  • Average daily growth rates of 180, 240 and 280 g/h/d
  • Cereal grain costs from $180, $220 and $260/tonne and overall ration costs of $215, $246 and $275 respectively

The analysis showed that it may be a worthwhile venture if:

  • High daily growth rates can be guaranteed
  • Grain cost if less than $220/tonne
  • Lambs return at least $4.60/kg.

Duddy states that the starting lamb value used of $65 represented 53-72% of total costs. Therefore, the value of the store lamb has the greatest impact on feedlotting lambs.

He states that other options include supplementing lambs on pasture or grazing early sown crops.

Australia - Making More From Sheep - Geoff Duddy
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