Quantifying sheep enterprise profitability with varying flock replacement rates, lambing rates, and breeding strategies in New Zealand

Abstract

Sheep sales are the major source of income for most New Zealand sheep enterprises. Terminal (meat breed) sires are used to increase lamb growth rates enabling lambs to be sold earlier at higher prices on a per kg basis. Their use in self-replacing flocks is generally constrained by requirements for purebred ewe lambs from which to choose ewe replacements. This study used a bio-economic system-dynamics model of a sheep enterprise to investigate use of terminal sires for a ewe flock with a range of ewe replacement and lambing rates. Values from New Zealand industry survey data were used to simulate a representative New Zealand North Island East Coast Hill Country sheep enterprise (self-replacing flock of 2182 mature breeding ewes with a stable flock size on 549 ha of pasture where 60.8% of feed was consumed by sheep). Three ewe replacement rates (20%, 25%, and 30% per annum), lambing rates (110, 130, and 150%; lambs weaned per ewe presented for breeding), and breeding strategies (no terminal sires; breeding the maximum possible proportion of mature ewes with terminal sires; and breeding half of the maximum with terminal sires) were modelled. Income from lamb sales increased with use of terminal sires, due to increased production of lamb liveweight for sale and lambs sold earlier for higher prices, resulting in greater sheep enterprise cash operating surplus (COS). Sheep enterprise COS increases, from no terminal sire use compared with maximum use of terminal sires, ranged from $3/ha to $101/ha. Larger increases in COS occurred with a higher flock lambing rate and lower ewe replacement rate, which allowed for terminal sire use over a greater proportion of the flock. Up to 65% of the flock could be bred with terminal sires while producing sufficient numbers of purebred ewe lambs from which to choose replacements. For an average North Island East Coast Hill Country sheep enterprise with a replacement rate of 25% and lambing rate of 130%, sheep enterprise COS increased by $15,021 with maximum use of terminal sires (45% of the mature ewe flock), compared with use of only maternal sires. Use of terminal sires increased annual sheep energy demand by up to 6% and changed the sheep feed demand profile, with increases in energy demand post-weaning in December mostly compensated for by subsequent reductions in demand following crossbred lamb sales in January.