Factoring in feedlot finishing

27 Jul, 2005 08:45 PM
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PROFIT could be made from finishing lambs in a feedlot but it was dependent on a variety of factors, Agriculture Department regional economist Lucy Anderton said at Sheep Updates in Perth last week.

With consistently solid sheep meat prices, many farmers wanting to benefit from the increased demand for heavyweight lambs had considered finishing lambs in a feedlot.

But the costs associated with setting up and maintaining the system had resulted in a conservative approach to embarking on such an enterprise.

Ms Anderton said a big cost factor was the number of days the lambs spent in the feedlot, which related to animals' initial weights on entry and growth rates.

Factors such as feed price and efficiency, the difference in price between store sheep and finished lambs, labour, and freight costs could also affect profit considerably.

Ms Anderton developed a calculation system to determine what ideally should be carried out to maximise the profits of lot feeding lambs.

A cost per head to finish a lamb in a feedlot was calculated, assuming the lamb's intake of grain or pellets was 3.5pc of the average body weight, with a 1pc intake of hay.

Ms Anderton said the calculator identified a common link between initial weight and overall costs.

"It clearly demonstrates the inverse relationship between the initial weight of the animal in the feedlot and the cost per head to finish," she said.

"The higher the initial weight, the less time it takes to finish and therefore the lower the cost."

The results indicated an animal put into the feedlot at 48kg liveweight would take 13 days at a total cost of $15.60/hd to achieve the target weight of 52kg/hd liveweight.

At the other end of the spectrum, a 36kg animal would cost $38/hd to reach the same weight.

"These results confirm that a low initial weight, lower growth rate, and higher cost of food ration combine to increase costs which compromise the profitability of the operation," Ms Anderton said.

"To minimise the costs in the feedlot the management starts before lambing, preparing the ewes and rams, aiming for a short lambing period to minimise the tail.

"Good growth rates from weaning onwards are needed to achieve the weight before entering the feedlot."

Ms Anderton said though there were disadvantages such as big capital costs, increased management and the potential to lose money if not done well, there were also big benefits to be gained from finishing lambs on the feedlot.

"It provides flexibility and there is more potential to increase stock numbers, as well as reducing the risk of environmental damage," she said.

"If done properly it can be very profitable, and it gives farmers more control over their enterprise."

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