Sheep Tech: Calculating the bottom line on ewes
Reducing variable costs and increasing weaning percentage per ewe are among Sean Conway's targets for 2015
Stocking rate, kilograms of output per ewe and average lamb price are the main contributing factors that determine the gross output per ewe and per hectare on sheep farms.
When variable costs such as fertiliser, concentrates, veterinary, contractor charges, straw and levies are subtracted from the gross output figure, then we can calculate the gross margin per ewe and per hectare.
Sean Conway's e-Profit monitor figures for 2014 on his farm at Ballymote, Co Sligo are outlined in the table (opposite).
Analysis and plan for 2015
Analysis of last year's figures will enable Sean to focus on areas that will increase the profitability of his sheep enterprise in 2015.
We start by focusing on the variable costs per ewe. Concentrates fed was the largest single variable cost at €22.58 per ewe or €15 per lamb weaned in 2014.
All ewes were out- wintered in 2014 and from January onwards Sean had to stop feeding silage due to poor ground conditions and excessive silage wastage.
Ewes were supplemented with concentrates to replace the silage and had access to grass.
With favourable weather and ground conditions, feeding good quality silage such as the 78 DMD made in 2014 would greatly reduce concentrate usage.
Fertiliser/lime cost per ewe was €17.98 and was a result of Sean responding to correct the results of soil analysis taken in February 2014.
This showed 83pc of samples to be deficient in phosphorus and required lime. Fertiliser and lime costs should not be as high in 2015.
Veterinary costs include all veterinary visits, dosing, antibiotics, vaccines, mineral supplements, fly strike prevention and scanning.
This amounted to €19.32 per ewe and, when combined with fertiliser/lime and concentrates, account for 90pc of total variable costs
Contractor costs are low for the sheep enterprise at €2.28 per ewe as they are out-wintered with very little silage fed.
The gross output per ewe at €138 is good, as was the figure of 70kg of live weight output per ewe.
Ewes in the flock include 35 ewe lambs that were mated in 2013. The standout factor restricting the overall gross margin per hectare is stocking rate.
The farm is currently stocked at 5.74 ewes/ha.
This is two ewes/ha less that the average lowland sheep farmers analysed in 2013 on the Teagasc eProfit Monitor system and over four ewes/ha less that the lowest stocking rate operated by Philip Creighton in the Teagasc Athenry Research demonstration flocks.
By increasing his stocking rate to 10 ewes/ha and in turn maintaining gross output per ewe and variable costs per ewe at around 50pc of output, Sean would generate a gross margin of €710/ha.
The target of €800 plus/ha is achievable by reducing variable costs and increasing weaning percentage to 1.6 lambs weaned per ewe to the ram.
This would put Sean on a par with the two-year average gross margin per hectare achieved in Athenry at similar stocking rates in 2012 and 2013.
Sean's aim is to increase ewe numbers to 250 and also to increase the area of the farm for cattle rearing to 50pc of the overall farm.
This would require an average of 60 store cattle to be carried over the entire year.
Contract rearing would be the preferred option.
If the stocking rate level was achieved the farm would then be stocked at 10 ewes/ha and could operate a mixed grazing system with the cattle and sheep.
To move to 250 ewes, Sean feels he would need to have winter housing for the ewes from January to lambing.
He is eagerly awaiting the announcement of grant aid for sheep housing in 2015.
Removing all sheep from the grazing area would allow a build-up of early grass for sheep and cattle and make best use of the top quality silage that he is currently making and selling.
With the plan to increase stocking rate, Sean will use the Teagasc Pasture Base system to monitor grass growth, and to react to surpluses and deficits when they occur.
The system will also identify the underperforming paddocks and ensure that ewes and lambs are grazing paddocks at grass heights that will maximise animal performance.
We will keep you updated throughout the year on Sean's experience of using the Pasture Base system.
Tom Coll is a drystock business and technology advisor with Teagasc in the Donegal/Sligo/Leitrim region
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