Making More from Sheep Australian Wool Innovation Limited Meat & Livestock Australia
MODULE 3: Market Focused Lamb and Sheepmeat Production
Procedure 3.1
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Background
information

Marketing of lamb and sheepmeat comes at the end of the on-farm sector in a segmented ‘paddock to plate’ production chain (figure 3.1).

Best practice management seeks to improve the operation of the production chain links to achieve higher levels of product quality and consistency and to direct benefits to all sectors. Sheep producers may benefit from relationships with agents, processors, wholesalers and retailers along the supply chain.

The basic profit drivers of a lamb and sheepmeat enterprise include:

Quantity of product produced per hectare;

Lamb weaning percentages (see procedure 10.3 in Wean More Lambs);

Cost of production, including the cost of marketing; and

Price per kilogram received for product.

Of these factors, the amount of meat produced per hectare has the greatest impact on income and gross margins. Select the time of lambing to achieve highest lamb numbers for sale before optimising the enterprise stocking rate to achieve target growth rates (see procedure 8.3 in Turn Pasture into Product). Lamb weaning percentages, feed use efficiency and pasture quality and quantity are the keys to profitable sheepmeat production.

At a Glance
Know the market specifications for lamb and sheepmeat.

pt Select a target market to suit the production environment.

pt Use the Lamb Growth Predictor to plan the growth pathway to the point of sale.

pt Monitor and evaluate the productivity and profitability of the production system.
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Key decisions, critical actions and benchmarks

Set annual production targets and timelines to monitor that the business is on-track and profitable in terms of quantity of meat sold (kilograms per hectare), cost of production (cents per kilogram dressed weight) and price received at sale (cents per kilogram). The key decisions in a profitable system are (1) know what you aim to produce, and (2) decide on a target market.

Know the specifications you aim to produce

Know your product and production system by measuring and recording details and evaluating performance. Use tool 3.1 to plan the average lamb growth rate to point of sale. Aim to segregate the lamb turnoff into top, middle and bottom thirds to account for the variation in the mob and apply the appropriate feeding management to achieve growth targets. Where possible, benchmark production performance and consider using a livestock adviser to increase performance and profitability.

An alternative tool for calculating individual growth rates and planning dates and numbers for marketing is the Sheep CRC Lamb Growth Rate Predictor tool listed in the signposts at the end of this procedure.

Modern, automated, easy-to-use weighing systems have also been developed for rapid weighing and sorting. The Cooperative Research Centre for Sheep Industry Innovation (Sheep CRC) Precision Sheep Management Program aims to speed up the transition from manual, time-consuming, imprecise flock management to high-tech, fast flowing, accurate individual animal management (see signposts).

Calculate your cost of production

Calculating your cost of production (measured in cents per kilogram) is important to identify options for improving enterprise performance. It can be the first step in making changes to the production system (see tool 1.6 in Plan for Success).

Figure 3.1. The segmented supply chain for lamb

Segmented Supply Chain for Lamb

To calculate whether lot feeding lambs is a viable and economically sound management decision use the Feedlot Calculator available on the Sheep CRC website (see signposts). This gross margin feedlot calculator enables you to enter different real time production, economic and feeding scenarios to estimate likely profit for lot feeding lambs.

Decide on a target market

The specifications for lamb vary depending on the market segment being targeted. Crossbred lambs are more favoured for the lamb trade but merino lambs have a niche in particular markets. For example they are suitable for live export in winter. There are also various markets for hogget and mutton products, Tool 3.2 provides a summary of the specifications for a range of markets for lamb and sheepmeat.

Table 3.1 provides a summary of the important features of a range of lamb categories. All of life growth rates for lambs can vary from 400g/day (fast growth), 250g/day (medium growth) 150g/day or lower (slow growth). The minimum requirement for high eating quality is a growth rate of more than 100g/day for crossbred lambs.

Table 3.1 Key features of lamb market categories

Lamb category

Liveweight (kg)

Hot Standard Carcase Weight (kg)

Market segment

Estimated growth rate
(average grams/day from birth)

Weaned
(4–6 months)

35

-

Store lamb

200

Weaned
(3–3.5 months)

33

 

Feeder

300

Unweaned
(4 months)

40

18

Domestic
supermarket

300

Carryover
(8 months)

45

20

Diverse

150

Carryover
(8 months)

55

25

Heavy export

200

Merino
(11 months)

47

20

Diverse

150

Demand for hogget (1 or 2 erupted permanent incisor teeth) and young Merino mutton (1-4 erupted permanent incisor teeth) may eventually compete with live export.

Meeting weight and fat score specifications for sheepmeat is important for successfully supplying a target market and best financial returns. Figure 3.2 provides a summary of the range of markets for lamb in terms of carcase weight and fat score. See tool 3.3 for how to fat score your lambs.

At most processing works, sheep with less than 6mm of fat - fat score 1 are not desirable and price may be penalised. In addition, under the Meat Standards Australia (MSA) carcass fat guidelines, lean (score 1 lambs) are not eligible for classification as MSA product. Table 3.2 describes the fat scores and tool 3.3 shows you how to assess your lambs in the yards.

Figure 3.2 Guide to lamb processor specifications

Decide on the finishing system

Pasture forage

A high energy / high liveweight gain pasture for lambs contains 11 megajoules (MJ) of metabolisable energy (ME) per kilogram of dry matter (DM) at 17% crude protein (CP). High energy legume based pastures, cereal forage or special purpose lucerne or chicory pasture all give good daily liveweight gains (see procedure 8.3 in Turn Pasture into Product).

Lot feeding

Lot feeding to finish lambs may be a viable management consideration, especially when relatively low-priced grain and roughage are available.

Be sure to calculate carefully the cost versus financial gain before starting a lot feeding program. The Sheep CRC Feedlot Calculator will assist in this assessment (see signposts).

Aim for 2 kg or more liveweight gain per week and monitor progress to ensure the lambs are gaining weight. Record liveweight on entry to the feedlot and weigh after 4-5 weeks to check on progress towards target sale weights.

Feeder lambs

There is increasing demand for high-quality feeder lambs from specialist lamb finishers and lot feeders. To supply this market producers should develop production systems that grow lambs to around 30kg sale live weight at 12–14 weeks average age. Aim for a turn off weight (33kg liveweight minimum – see table 3.1)

Explore market options (see procedure 3.3), build a supply chain relationship with finishers and use high genetic merit sires for carcase attributes (see procedure 9.2 in Gain from Genetics) and ensure health management processes suit the production system (see procedure 11.2 in Healthy and Contented Sheep).

To maximise turnover and profit, maintain a focus on production efficiency and turn-off (kilograms of lamb produced per hectare).

Match the production system to land capability

Matching target markets to the land capability and production environmentcan be achieved by:

  • Matching the genetic merit to the availability of pastures and crops, the pattern of rainfall and the length of the growing season (see procedures 9.1 in Gain from Genetics and 8.3 in Turn Pasture into Product).

Then, by:

  • Matching the proposed target market to the breed and type of lamb.
  • Planning the finishing phase (use of pasture versus fodder crop or grain feeding) and matching this to the choice and specifications of target markets.

Table 3.2: Carcase descriptions

Fat Score

1

2

3

4

5

GR tissue depth in mm

0 to 5 mm Not eligible for MSA

6 to 10 mm

11 to 15 mm

16 to 20 mm

20 mm and over

Feel at the 12th long rib

Individual ribs felt easily. Cannot feel any tissue over the ribs

Individual ribs easily felt but some tissue present

Individual ribs can still be felt. Can feel more tissue over the rib

Can only just feel ribs. There is fluid movement of tissue

Ribs cannot be felt. Tissue movement very fluid

Signposts Signposts

Read

Producers guide to production feeding for lamb growth - publication number 9781741911060. Order a free a copy from MLA by:

View

MLA Lamb Cost of Production Calculator: Tool 1.6

Sheep CRC Lamb Growth Rate Predictor Tool: Calculate individual growth rates of lambs and predict finishing times.

Sheep CRC Precision Sheep Management: includes auto-drafting and auto-weighing technologies for remote individual animal management.

Sheep CRC Feedlot Calculator tool: estimate likely profit for a lamb feedlotting enterprise under various scenarios. 

For the three tools above visit: www.sheepcrc.org.au/industry/sheep-management/precision-sheep-management.php, scroll down and click on the Products and Training Resources tab.

National Procedures and Guidelines for intensive lamb feeding systems (Edition 2) along with Planning and Management Checklist can be found by following the links from the home page at www.productivenutrition.com.au

 

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