Prime Lamb Finishing Options

Summary

The previous 12 years has seen an increase in the intensification and specialisation of the Australian lamb industry where lamb production has increased despite the reduction in size of the national flock.
The prime lamb finishing sector has responded to the need to overcome variation in seasonal pasture quality and availability by investing in more intensive lamb finishing systems. These investments include the establishment of high performance pasture in high rainfall zones, growing cereals for winter feed production, sowing short term fodder crops for summer feed production and the construction of intensive feeding systems for grain finishing. These investments have provided the market with access to year round, high quality lamb supply.
The development of a variety of feed bases to fill feed gaps at various times of the year has resulted in a finishing sector that can be described within four systems:Traditional breeder-finishing
Specialist pasture finishing
Specialist grain finishing
Opportunisticgrain finishing

Despite the growth within the lamb finishing sector the key profit drivers across these four finishing systems has not been clearly defined to date and for the lamb finishing sector to continue to grow as an industry, a clear understanding of the key profit drivers within each finishing system is essential to facilitate confidence and encourage ongoing investment.
The aims of this project were to:Determine the key profit drivers within each system and rank them in order of importance
Compare the relative profitability of each system
Conduct a sensitivity analysis of all the profit drivers to key business and management elements within each system
The most profitable lamb finishing system was the traditional breeder-finisher system due to the contribution of Merino wool from the breeding ewes to the profit margin and the low cost of production of finishing lambs produced on farm.

In order of profitability, the breeder-finisher system was followed by the specialist pasture finishing system, specialist grain based finishing and opportunistic finishing.
The least profitable pasture based system was where lambs were finished on fodder crops and the most profitable was the system where lambs were finished on cereal stubbles.
The most profitable grain based finishing system was the specialist feedlot system where the effect of scale was highly significant; scale in terms of throughput and turnover rather than capacity.​
The key profit drivers, in order of importance to each system were found to be:
1. Traditional breeder-finisher system

a. stocking rate

b. weaning percentage below required replacement rate

c. carcase price

d. variation in weaning percentage of ±10%

e. breed of lamb (crossbred vs. Merino)

f. purchase cost of replacement ewes

2. Specialist pasture finishing:

a. carcase price

b. purchase price

c. stocking rate

d. growth rate

e. mortality rate (>10%)

f. fertiliser cost

3. Specialist grain based finishing

a. purchase price

b. growth rate

c. carcase price

d. scale

e. shy feeders

f. mortality rate (1-5%)

4. Opportunistic grain based finishing

a. carcase price

b. purchase price

c. infrastructure costs

d. growth rate

e. scale (feedlot capacity)

f. shy feeders

Strategic investment in research, development and extension activities to ensure that producers have the skills to appropriately manage key profit drivers will improve the viability and long term sustainability of their business and the lamb finishing sector as a whole.
A summary of findings and key profit drivers for each enterprise has been encapsulated in a separate Tips & Tools publication.