NSW Department of Primary Industries (DPI) sheep and wool livestock officers are frequently approached for an opinion on market issues such as price forecasting and supply patterns.
While difficult given the unpredictable nature of our lamb industry we can use estimates and software to estimate the profitability of finishing store lambs (16-18kg HSCW) to trade or export weight categories over the approaching months.
If we assume that it costs the average producer 300c/kg to produce a store/restocker style lamb (35 kg live = 16-18kg carcass) crossbred lamb then each lamb costs you from $48 to $54.
This is your break-even price. With this category of lamb trading at around 510c/kg at the moment ($82 to $92/head) this roughly equates to a profit margin of around $30 plus when sale costs are taken into account.
Is it profitable – or too risky – to finish store lambs in a feedlot?
To answer the question I entered current prices for stock and feed grain through the Sheep CRC Feedlot Calculator. Assumptions used were:
- Crossbred lambs (35kg live, $100/head) growing at 300g/h/d
- Ration consisted of barley ($175/t), lupins ($250), cereal hay ($80).
- Basic management costs (drench, vaccination etc), sale costs (transport, commission, slaughter levy etc) plus labour, overdraft and wastage rates were included
- Profit margin of $15/head needed to make it worth while feeding.
Email a friend