SOUTH East Australian sheepmeat producers should be achieving at least 40 kilogram live weight per hectare per 100 millimetres and wool producers seven to eight kilograms of wool clean per hectare per 100 millimetres to be in the profitable operation ball park.
The University of Melbourne’s Mackinnon Project consultant John Webb Ware last Wednesday said sheep producers wanting to maximise their profit should have a clear understanding of their operations’ profit per hectare.
He said focusing solely on boosting reproduction rates was not necessary going to lead to a more profitable business.
“You have got to keep it in perspective,” Dr Webb-Ware said.
“Maximising fertility does not necessarily mean maximum profit as you can spend lots money getting condition on sheep and then might loose out,” he said.
“Stocking rate is where attention should be at as it is the number one driver for profit.”
The senior sheep consultant, in a presentation to the Maryborough BestWoolBestLamb group, urged its members to constantly analyse their operations performance rather than chase market trends.
“Some wool enterprises are still as profitable as a meat enterprise, particularly if the enterprises have good genetics and they are taking advantage of the high values in the surplus sheep market,” Dr Webb-Ware said.
“One long term advantage of sheep over cattle used to be that sheep had less capital tied up in stock value compared with cattle, this has changed somewhat.”
Dr Webb Ware said producers reliant on buying replacement ewes should in the face of record prices be factoring in the depreciation cost of new purchases.
He warned if lamb prices started to retreat the current cost paid by some producers will look very expensive.
“For producers with terminal flocks, the high replacement cost is why some people are now getting more interested in breeding their own ewes, to reduce their exposure to this market.”
Dr Webb-Ware said producers that are maintaining a profitable self replacing Merino flock can still be exposed to the prime lamb industry by joining a portion of ewes to a terminal sire or breeding their own self replacing lamb enterprise which has less reliance on merino ewe numbers.
“People have got a reality check as they have realized they have joined too many to a terminal and have not kept up their Merino ewe numbers. This has resulted in many producers having to buy expensive ewe replacements. Typically, the age structure of your merino ewe flock will come under pressure if more than 30 per cent are joined to a terminal rams.”
The comments came as meat and Livestock Australia last week reported that the nation’s sheep flocks were forecast to slow to around 2 per cent in 2010, to 69.9 million head.
Despite this, MLA’s sheepmeat analyst Kara Tighe said Australian lamb production is on track to post a record high in 2010, up 2per cent on 2009 levels.
A NSW Department of Primary industries sheep maternal sire comparison shows that variation in lambing rate of the first cross ewes was the major profit driver with difference of up to 45 per cent for lamb weaning rate between first cross ewe progeny.
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