If you own or lease a parcel of the Australian landscape, and hope to make a decent living from it, you need to give serious thought to which enterprise(s) in which you choose to engage.
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Sometimes it is obvious. But what if you have a choice?
Let’s break this down for the livestock choice, sheep or cattle.
Firstly, the average sheep flock will be more profitable than the average beef herd in the long-term. There may be runs of years when this is not the case but, over say 20 to 30 years, on average it is true.
However, most importantly, you have to be passionate about your livestock choice.
It is counter-productive to decide on sheep if you can’t stand the sight of the things; you are unlikely to do well with them if this is the case. The same applies to beef cattle.
Passion is usually accompanied by dedication and management skill, essential elements of a highly profitable enterprise.
There is nothing wrong with running both, provided the flock and the herd both have sufficient operating scale to warrant a stand-alone enterprise status and you have the required expertise to run both well.
If my property carrying capacity was 20,000 DSEs (2,400 AEs) or less, I would specialise in one enterprise. Serious specialists are always more profitable.
So, you have made your choice. Sheep, cattle or both.
On sheep
Let’s start with sheep where there are two choices, wool sheep or meat sheep. Yes only two. Please do not think that you can have two-bob each way and be a winner. This serious delusion has befuddled the minds of too many sheep producers for too long.
Sheep are specialists and their owners should be too. They either grow wool or they grow meat.
About the worst sin you can commit is to regard yourself as primarily a wool grower and select for carcase characteristics at the same time. You will languish.
Wool growth is most efficient on maintenance feed. Take the humble wether for example. Keep it lean, perhaps condition score 2.5 and wool production will be optimised. Creep it up to CS 3.0 to 3.5 and stocking rate must fall. Goodbye to wool produced per hectare because too much of the available dry matter is needed to maintain CS.
The same applies to flock fertility, which is not a profit driver in wool growing flocks beyond that required for the flock to self-replace. Chase it if you will, but consider this. If you jump from 70 per cent lambs weaned to 90pc, you will have to sell adult sheep to make room for the additional weaners, assuming you are optimally stocked.
If you can absorb the extra weaners, you are under-stocked.
If you can’t, your wool production/hectare will suffer.
For wool flocks, it is all about individual fleece value. At this time, there are flocks out there with more than $100 of fleece value on their backs, and others with less than $30.
This difference flows right through to their bottom line.
Meat sheep production is entirely different, as production feed is needed. Unlike wool, meat needs a higher grade of feed available for the best result.
Flock fertility comes into play, as does lamb growth rate. However, stocking rate in terms of ewes/ha still dominates.
You also need to consider the ability to finish. Meat production is about finishing as there are hidden dollars between the store article and the finished article.
I despair for those producers who present store lambs and/or weaner cattle for others to profit from. If you have produced these articles, you have borne all the costs of doing so and you have left potential profit on the table for someone else to absorb.
On cattle
Whether you run a breeding or growing (aka trading) operation should be primarily determined by the ability of your country to reliably put kilograms on growing animals (it must be at least 150kg/yr) and your ability to manage pasture and risk.
The mindsets of breeders and traders are different. Breeders need to be steady and patient, where traders need quick thinking and are more tolerant of risk.
The characteristics of the top performing beef business are consistent across enterprise types. They have more productive herds, their herd expenditure is better targeted and more effective, they use labour more efficiently and they have sufficient operating scale.
It is so easy to move into a different world where a beef herd can actually generate serious wealth if you mould it that way.
The Australian Beef Report (www.bushagri.com.au/abr) was prepared to assist those producers who have chosen beef in moulding highly profitable beef businesses.
