Model helps find optimal lamb drop

AbacusBio farm consultant Cameron Ludemann.

08-05-2009 | Gerard Hall

Increasing ewe prolificacy above average levels can significantly boost sheep farming profits, says AbacusBio farm consultant Cameron Ludemann.

However, farmers need to seriously consider what the optimal lamb drop is for their ewe flock and how far to push ewe prolificacy before it impacts on their net profit.

Ludemann built a whole-farm computer model during his year-long Masters research project at Lincoln University. His model identifies the points where increasing a ewe flock's lamb drop may no longer contribute to extra profit.

It shows net profits (figure 1) on Canterbury dryland sheep and beef properties can be increased up until the level of ewe prolificacy (number of lambs born: ewes lambing), reaches approximately 200%. Assuming average lamb survival rates, this equates to about 150% lambs weaned per ewe mated.

Above this level, net profits may decline due largely to the significant rise in the proportion of lambs born as triplets and quadruplets.

Brought up on his family's Mayfield sheep beef and crop farm in Mid Canterbury, Ludemann recently graduated with a Masters degree in Applied Science (professional farm management consultancy).

After some work experience with AbacusBio while at university, Ludemann joined the Dunedin-based agribusiness company earlier this year as a farm management and animal genetics consultant.

His interest in the research topic was piqued by farmers he talked with while at Lincoln. They questioned whether their neighbours were actually banking greater profits when their ewe flocks were churning out higher lambing percentages.

About the same time, there seemed to be significant emphasis by ram breeders on improving ewe fertility. This led Ludemann to question whether increasing a ewe flock's lamb drop was still financially worthwhile for farmers, given the current levels of ewe fertility being achieved in some ewe flocks.

While average ewe prolificacy (EP) levels in the New Zealand sheep flock are now about 150%, or 125% lambs weaned: ewes mated, many farmers are pushing their flocks beyond the average to above the optimal 200% EP Ludemann describes in his research.

This poses the question of what farmers should be doing if they believe their ewe flock is close to, or already performing above, its optimum EP.

Above optimal EP, the benefits of churning out more lambs per ewe can begin to become outweighed by the additional costs of feeding the ewe and lower average lamb survival.

Higher ewe fertility increases pregnancy and lactational feed requirements. To compensate, a drop in the number of ewes being carried or greater use of supplementary feed may be required.

Ludemann's study honed in on dryland sheep and beef properties in Canterbury and Marlborough.

To simulate the impact of increasing lambing percentages on the net profit of a typical Canterbury dryland sheep and beef property, Ludemann built a whole-farm model (table 1) based on MAF Policy's Canterbury-Marlborough model. He then linked it to a linear programme designed to optimise solutions, in this case aiming for maximum farm net profits.

Factors taken into account included pasture growth rates, changes in livestock energy requirements, fixed and variable costs and product returns. The scenarios canvassed included altering stocking rates and stock selling policies as the lamb drop increased.

Ludemann's study shows for the average farmer at 150% EP (125% lambs weaned: ewes mated) there is still significant potential to increase farm profits through improving ewe fertility.

However, farmers at the optimal 200% EP (150% lambs weaned to ewes mated) may be better to focus their efforts on lifting lamb growth rates or liveweight gain. Unless of course they can increase survival rates of triplet-born lambs or reduce the proportion of lambs born as triplets. Both are limiting factors to lifting the profitability of ewe flocks already performing above optimum EP.

Ludemann says there are no free lunches with ewe fertility, and increasing it does come with some added costs.

Higher ovulation rates require the ewe to consume greater amounts of energy to maintain the conceptus.

Greater ewe demands during spring may allow farmers to maintain pasture covers more easily.

However, on dryland Canterbury properties there are added costs during summer when there are additional lambs requiring finishing.

Climate also obviously plays a part, so livestock selling policies were found to be significant profit drivers. The analysis including looking at different selling policies, such as keeping triplet and quadruplet lambs on later and then selling them finished when lamb prices began to rise again in May/June.

While fine in theory, dryland farmers well know there can be significant drought risk involved in retaining lambs later into the season to gain premiums.

In higher fertility flocks there will be more triplet lambs with lower liveweights at weaning that require more feed over summer to get to target carcaseweights. Also, more feed will be wasted on those lambs not making it to slaughter due to lower triplet and quadruplet survival rates.

When Ludemann talks about optimal ewe prolificacy he is referring to the ewe flock's lamb drop that creates the highest possible net profit.

His model uses industry averages for factors such as lamb survival, the proportion of lambs born as singles, twins and triplets and their respective growth rates from birth to sale.

Net profit is the revenue from each class of stock, minus the variable costs associated with each livestock class, minus fixed farm costs. Net profit is what is left over to pay the taxman and provide drawings for the family.

Expenses used in Ludemann's model were Meat & Wool NZ averages for the 2006-07 farming year. They were split between variable and fixed costs.

Some variable costs did increase as the lamb drop increased or the number of stock units was altered. Several costs remained constant as they were fixed to the area of land.

Product prices used were those prevailing during the 2006-07 season and included an average lamb price of $55 a head.

Ludemann points out using ‘average prices' can sometimes be misleading as they depend on what you are measuring.

"If you simply averaged the monthly price per kilogram of lamb and multiplied it by the 17.5kg CW lambs were killed at, the average lamb price would be about $59. But, of course lambs are not always sold evenly throughout the months."

Asked what would happen if current lamb prices were plugged into the model, Ludemann says absolute profit figures would increase according to the lamb price. However, similar profit trends would remain.

Changes in lamb prices do have an effect on absolute net profits levels, but not on the overall trend in profitability relative to ewe prolificacy. This is because the lamb schedule disadvantages the lower carcaseweights of triplet lambs relative to single and twin lambs, regardless of the actual lamb price.

However, he did not take into account farmer preferences and their differing attitudes towards managing triplets. Tired of the hassles involved with triplets, some do have a low tolerance and are content with a lower optimal EP even though optimal net profit is not being met.

As well as using analytical techniques and models to establish if a farmer's ewe flock is at the optimal, it is important to consider farmer attitudes towards increasing numbers of triplets being born.

"If they are talking about how many ‘bloody triplets' the ewes are having, the chances are they are well past what I would call their psychological optimum. This will not necessarily be the economic optimum."

While he acknowledges some research is underway, Ludemann believes the issue of farmers being sick and tired of triplets by the end of lambing is real and needs a greater focus.

What appears to be driving farmer attitudes and limiting them from reaching optimal ewe performance levels, and in many instances higher net profits, is the hassle of more triplets and quadruplets and the associated lower lamb survival rates and lamb liveweight gain.

He suggests farmers wishing to push their flocks lambing performance above the optimal EP levels redirect their focus to genetic improvement and management strategies that improves lamb survival and lamb liveweight gain of multiple-born lambs.

While genetic progress will be slow until a research breakthrough occurs, gains can be made by selecting ewes that produce a higher proportion of twins rather than triplets relative to EP.

Alternatively, as some are doing already, farmers could throttle back on ewe fertility by manipulating stocking rates and switch their focus towards increasing lamb growth rates.

Ludemann acknowledges some farmers enjoy the challenges of consistently achieving higher levels of lamb survival and liveweight gain in their high performing ewe flocks. As a result their flock's lamb drop may yet not be above the optimum.

However, he also believes some farmers are perhaps driving production at the expense of net profits. They may be focusing on increasing lambing percentages to impress the neighbour rather than thinking about the effect on the farm's bottom line.

As well as focusing on year-round feeding of their ewe flocks, farmers yet to reach their optimal EP, and keen to do so, should align themselves with a good ram breeder placing emphasis on fertility.

Another option to consider is using a tool such as Androvax to increase numbers of lambs born. However, if farmers believe their flock is nearing optimal ewe fertility they might just end up with too many triplets.

Ludemann is not suggesting the ultimate ewe prolificacy to aim for will remain around the 200% mark.

Increasing triplet and quadruplet lamb survival (65% and 55% respectively) to similar levels as twin lambs (85% lambs sold per lambs born) could increase net profit at 200% EP by a similar cash amount to that generated by a 20% lift in post-weaning lamb growth rates.

"What farmers need to consider is how easily they could make progress. For many it is likely to be easier to lift post-weaning growth rates by 20% than increase the survival rates of multiple-born lambs."

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