Benefit and cost of performance recording in the beef and sheep studs

Summary

The Australian red meat industry currently has little objective basis to assess whether its breeding sector has the financial capacity to increase investments in tools to record more data on bull and ram performance, animal management and cost of production.

This project surveyed producers to estimate the potential profitability in beef and sheep studs in Australia, by assessing if there was a difference between those who use the industry genetic evaluation systems, BREEDPLAN and Sheep Genetics, and those who don't.

Results show that users of BREEDPLAN and Sheep Genetics have larger businesses and are more profitable compared to non-users. There is some capacity for businesses that currently use the performance recording systems to increase investment into further data recording in beef and sheep studs.

Objectives

This project collected data on costs associated with operating a stud and costs specific to performance recording using BREEDPLAN and Sheep Genetics (such as size of flock or herd, average number of bulls or rams sold and average price).

This information was used to develop a cost benefit analysis to determine the profitability of performance recording in Australian ram and bull studs.

Key findings

Businesses that use BREEDPLAN or Sheep Genetics are significantly larger than those that don't:

• an average 270 cows per herd for BREEDPLAN users, compared to 40 for non-users
• an average 559 ewes per flock for Sheep Genetics users, compared to 381 for non-users.

All aspects of herd or flock income are higher for businesses that use BREEDPLAN or Sheep Genetics:

• higher value per animal sold - $5,103 compared to $2,542 for bulls and $1,089 compared to $729 for rams
• higher income from semen sales - $31,818 compared to $0 for bulls and $20,955 compared to $5,922 for rams
• total sales income - $511,034 compared to $36,896 for bulls and $214,192 compared to $60,094 for rams.

The return on investment, including valuation of the herd or flock, operating costs, plant and equipment is:

• 21% for BREEDPLAN users compared to -20.2% for non-users
• 24% for Sheep Genetics users compared to 2.3% for non-users.

Benefits to industry

Although the conclusions from this survey must be treated with caution given the sample size, the results will still assist industry in understanding the benefits of performance recording in stud livestock.

The information reveals differences in recording costs and margins between breeds and regions, which can be used to formulate strategies to optimise industry productivity and profitability.

MLA action

In association with other demographic information, the results of this project will be utilised when building strategies around ongoing collection of genetic reference data and investment within the MLA livestock genetics program.

Future research

To increase the amount of data collected for ongoing review of performance recording, industry stakeholders could be consulted on the findings of this research to develop alternative strategies for data collection that best suits them. This could be through feedback forms distributed to BREEDPLAN and Sheep Genetics members.