The livestock industry continues to be crippled by the ethanol mandate and the recession.  The lamb industry is no exception.  U.S. lamb production dropped 10.5% from 2006 to 2009.  When grain prices exploded in 2008, livestock prices did not keep pace and producers began suffering severe losses.  The economic recession that started in Fall 2008 made a bad situation much worse.

While 2009 brought somewhat lower feed prices, lamb prices also declined.  Grain prices are well above the 5 year average while lamb prices are significantly lower than the 5 year average.  Something needs to change.

Many producers are looking to switch to a low cost of production model.  By my estimates, an ewe weaning two 75 lb lambs on a pasture based system will lose about $28 per year under current market conditions.  By comparison, a ewe producing twins in a birth-to-finish, mid-winter (January-February) lambing system would lose about $19.   Choice of systems is a matter of preference and available resources, but I don't see one being particularly advantageous.

The above figures are based on a total cost basis (fixed and variable costs).  Many producers gauge profitability on a variable cost basis, as they figure they own certain assets such as land, buildings and machinery already.  While this approach should not be used in a growth oriented business plan, it may make sense in tough market conditions.  On a variable cost basis, the ewe producing twins in the birth-to-finish system earns about $36 per year.

Flocks producing a 200% lamb crop on a total flock basis a pretty few and far between.  Many breeds simply are unable to produce at levels high enough to be profitable in our current market environment.  It's not a coincidence that I have dispersed most of my Columbia and Columbia cross ewes.

My purebred Polypay flock has averaged a 196% production rate over the last 5 years.  The top 50% have produced a 232% lamb crop.  This level of production produces a $12 per head profit on a total cost basis ($63 on a variable cost basis).  While these levels aren't enough to justify expansion, they are enough to help flocks weather these tough economic times.

The above analyses shows the difference genetics make.  In my own flock, the difference in profitability of an average ewe (-$23) and one in the top half (+$12) is dramatic.  Over the years I have drawn the following conclusions when it comes to breeding:

1.  First and foremost, know which ewes are making you money.  Retain their daughters, regardless of what breed they are or what they look like.

2.  Know your flock's strengths and weaknesses.  Cross breeding is a very quick way to fix problems.  If your flock is already very productive, make sure you bring in rams that will build on its success, not ruin it.

3.  Select breeding stock based on the performance of the individual sheep's lineage, not breed averages.  I've seen Polypays outgrow Suffolks and Columbias that drop more lambs than Romanovs.  Individual performance trumps "breed".

4.  Look at the overall productivity of the breeding stock you are purchasing.  Total productivity depends on body size, prolificacy, milking ability, assisted birth rates, survival rates, longevity of the ewe, etc.  Increasing one characteristic at the expense of another doesn't improve your bottom line.