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Prime lamb & southern beef situation analyses

This project delivered two separate situation reports. 

Prime lamb situation report 

* Lamb enterprises are currently experiencing higher profitability than wool or beef but not cropping enterprises in higher rainfall zones. 

* Across rainfall zones lamb enterprises are the most profitable livestock enterprise choice in the medium to high (>500mm) rainfall zones but in low rainfall zones they are the least profitable livestock enterprise. 

* Wool represents an average of 43% of dual purpose income and in prime lamb 23%. Lamb producers seeking improved profitability should not ignore the opportunities offered by the wool component of their total income. 

* There is more variation in profitability within lamb production businesses than there is between them and other enterprise options. The improvement in performance of a lamb production enterprise offers as much or more potential profit as changing between lamb and an alternate enterprise. 

* The most profitable lamb production businesses have a superior combination of higher productivity, lower cost of production and higher price received. The important consideration is the combination of these factors, they do not have the single highest productivity. 

* Productivity is driven by the number of ewes run per hectare, the number of lambs produced per ewe run and the weight of lambs when they are sold. 

* Cost of production on average has appreciated by almost 100% in the past eleven years. Although productivity has increased over the period, this has come at ever increasing cost. The major cost for sheep flocks is the labour employed and improving labour efficiency should be a priority for flocks with high cost structures. Any reduction in cost needs to be considered in relation to the potential impacts on productivity. Southern beef situation report 

* Droughts in the past eleven years have had a substantial impact on the average profitability of beef herds across south eastern Australia. 

* When compared to alternate enterprise choices of wool, dual purpose, prime lamb and cropping, beef has comparable profitability to other livestock options but has been less profitable - on average - than wheat. Across the low (650mm) rainfall zones over the long-term, average beef enterprise profitability has been greater than that for wool enterprises, but less than that of lamb and wheat enterprises. 

* There is more variation in profitability within each of these alternate enterprises than there is between the average profitability of each enterprise. Beef producers therefore have more potential to improve their profitability by focusing on increased efficiency within their enterprise, rather than changing to an alternate enterprise. 

* Variability in beef enterprise profitability, as with alternative livestock enterprises, is significantly lower than that for both wheat and canola enterprises in low, medium and high rainfall zones.  These differences need to be acknowledged when considering equity levels at which the business can afford to operate. 

* The most efficient and profitable beef producers have a combination of higher productivity, and a lower cost of production. They do not have the individual highest productivity or price. 

* The trend among average producers over the eleven years is for a stagnated cost of production due to small increases in productivity coming at ever increasing cost. 

* There remains significant potential in most beef (and livestock) enterprises to reduce costs per unit (kg, DSE, hectare) of production by increasing labour efficiency. The most efficient beef herds employ a full time labour unit for every 15,000 DSE run, while the average of all herds is 10,000 DSE per labour unit. 

* Productivity improvements are possible but should be made in consideration of the changes to costs; in many cases, lower cost and/or simpler options are best undertaken before implementation of more expensive alternatives.  In grazing operations, ensuring the efficient utilisation of existing pasture growth is the critical initial step, following which strategies to grow more pasture can be explored. 

* In the main, increasing productivity in the herd is achieved through:     

- Optimising stocking rate - cost-effectively maximising and matching feed supply and demand, and the conversion of pasture into saleable product;      

- Ensuring optimum age and weight at sale - cost-effective management of nutrition and breeding to maximise specification compliance with the target market(s); and,       

- Optimising herd weaning weight 

- cost-effective management of nutrition, breeding and weaning to increase the rate of liveweight gain and consistency of weaning weights.

Downloads

Title Size Date published
168.1KB 23/08/2010
151.8KB 23/08/2010

This page was last updated on 10/07/2017

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