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

Locations Served by the SCHSA

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

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.

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.

Food City Partnership Demand for 10,000 head per year Year Head Total Pounds Avg. Price Carcass Wt. Avg. Total $ Received 2005 1,729 90,545 $ 3.00 52 $ 271,635 2006 3,691 116,000 $ 348,000 2007 4,213 226,983 54 $ 680,949 2008 4,827 276,800 $ 3.20 57 $885,760 2009 4,250 242,257 $ 775,222 TO DATE 18,710 952,585 - $ 2,961,566

Lamb Carcass Quality Evaluation Scott Jerrell, Extension Agent 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

Weekly Prices Marketing Scenarios New Holland vs. Food City 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

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

Economics of Sheep Production

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

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

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

TOTAL SAVINGS OF $30 PER ACRE 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

Pasture Management Maximize manures Sheep 6.21 T/A Max. application rate * Nitrogen based # Nutrient per Ton % Composition Value per Ton Value per Acre # Nutrient Applied at Max Rate % Availability Adjusted Nutrient Available Deficit or Surplus Purchased Fertilizer Cost N 23 1.15 $ 38.81 $ 241.07 142.86 35 50.00 0.00 $ - P 8 0.4 $ 7.65 $ 47.53 49.69 100 (35.06) $ 33.54 K 20 1 $ 14.19 $ 88.16 124.22 41.72 $ 60.66 Annual manure production per AU = 7.24 T.

Pasture Management High Quality Grasses and Legumes Rotational Grazing Orchardgrass, Perennial Ryegrass, Fescue Clovers (Red, White, Crimson), S. Lespedeza, H. Vetch Rotational Grazing Even in drought, rotational grazing will extend grazing season.

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.

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

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

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.

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

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

Protein Feeds % Dry Matter % TDN NEm Mcal/lb NEg % CP % Fat Ca, % DM Soybean meal – 44 % 89 84 0.94 0.64 49.9 1.6 0.4 0.71 Whole soybean, roasted 90 94 1.07 0.75 42.8 18.8 0.27 0.65 Cottonseed meal 92 75 0.81 0.53 46.1 3.2 0.2 1.16 Whole cottonseed 95 1.08 0.76 24.4 17.5 0.17 0.62 Poultry litter 78 60 0.99 0.59 28 ND 2.3 2 Fish meal 72 0.47 66 8 6.4 3.6 % TDN = % total digestible nutrients; NEm = net energy for maintenance; NEg = net energy for gain; % CP = % crude protein; Ca = calcium; P = phosphorous

Energy Feeds Energy Feeds High energy, others and by-products % Dry Matter % TDN NEm Mcal/lb NEg % CP % Fat Ca, % DM P, Grains Corn, 56 lb/bu 87 88 0.91 0.61 9.8 4.3 0.03 0.31 Corn, cracked 90 1.02 0.7 4.1 0.32 Barley, heavy 74 0.94 0.64 13.2 2.2 0.05 0.35 Oats 91 73 0.79 0.5 13.6 4.9 0.07 0.3 Milo 85 0.95 11.3 1.9 0.34 Wheat 89 76 0.83 0.54 11.6 3.1 0.33 High energy, others and by-products Brewers grains, wet 21 70 0.74 0.47 26 6.5 0.29 0.2 Distillers grains, wet 25 9.9 1.4 Corn gluten feed 80 0.88 0.6 23.8 3.9 Hominy 1.03 0.71 11.5 7.3 0.57 Soybean hulls 0.59 12.2 2.1 0.53 0.18 Wheat middlings 83 0.92 0.62 18.4 3.2 0.15 1 Molasses 72 0.77 0.49 5.8 0.1 % TDN = % total digestible nutrients; NEm = net energy for maintenance; NEg = net energy for gain; % CP = % crude protein; Ca = calcium; P = phosphorous

Forages Forage Testing is only way to know nutritional content.   % Dry Matter % TDN NEm Mcal/lb NEg % CP % Fat Ca, % DM P, Urea forages Spring pasture 21 79 0.87 0.58 26 3.7 0.55 0.45 Summer pasture 22 67 0.72 0.43 19.5 3.2 0.4 0.27 Fall pasture 24 53 0.49 0.24 0.25 Stockpiled fescue 49 60 0.59 0.34 11 3.5 0.3 0.2 Fescue hay,avg. 91 54 0.56 0.31 10.5 5.3 0.32 Fescue hay, mature 44 0.1 8.7 4.7 0.41 Corn silage 35 69 0.73 8.5 2.6 1.19 Orchardgrass hay (2nd cut) 89 65 0.67 12.8 2.9 Alfalfa hay, bloom 55 0.52 0.26 17 3.4 % TDN = % total digestible nutrients; NEm = net energy for maintenance; NEg = net energy for gain; % CP = % crude protein; Ca = calcium; P = phosphorous

Current Feed Prices

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?

66 Pound Lamb Nutrient Requirements Feed Cost Scenario 66 Pound Lamb Nutrient Requirements CP (#/day) 0.42 TDN (#/day) 2.1 COST Hay 10.5% CP, 60% TDN (2 #/day) 0.21 1.20 0.90 $0.15 Corn (2#/day) gut limited 0.00 1.76 0.86 $0.24 Corn Gluten (1.13 #/day) 0.27 0.06 $0.09 Wheat Midds (1.2 #/day) 0.99 0.09 $0.16 Oats (1.7 #/day) 1.28 0.38 $0.29 Soybean Meal 44% (1.1 #/day) 0.48 $0.32

66 Pound Lamb Nutrient Requirements Feed Cost Scenario 66 Pound Lamb Nutrient Requirements CP (#/day) 0.42 TDN (#/day) 2.1 COST Hay 10.5% CP, 60% TDN (2 #/day) 0.21 1.20 0.90 $0.15 Corn (2#/day) gut limited? 0.00 1.76 0.86 $0.24 Corn Gluten (1.13 #/day) 0.27 0.06 $0.09 Wheat Midds (1.2 #/day) 0.99 0.09 $0.16 Oats (1.7 #/day) 1.28 0.38 $0.29 Soybean Meal 44% (1.1 #/day) 0.48 $0.32 Daily Ration Cost $0.24

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

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

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

Member Scenario 83 ewe farm 173 lambs 110 market lambs 63 ewe lambs

Income from Sales: $24,700 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

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

Member Scenario Return per Lamb: $116.23

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