Introduction

Materials and
Methods

Results and
Discussion

Conclusions

References

Project
Background

Critical Control Points For Profitability In Sheep Production

Dan Nudell, Harlan Hughes and Tim Faller
Hettinger Research Extension Center
Department of Agricultural Economics
North Dakota State University


Abstract
Financial and animal performance records from sheep producers in Western North Dakota were analyzed to determine critical control points which played the largest role in determining producer profits. Records included individual animal production performance and total flock financial performance. Ninety-six sets of flock records were studied from over 30 different producers. This study found that traditionally accepted determinants of profit were not good indicators of actual profit. In fact, ewe lambing rate was not a significant determinant of profit. Pre-weaning lamb death loss played only a small role in determining profit.

Net profit was determined by Unit Cost of Production (UCOP), Gross Income (GROSS), a management measure (MANAGE), and adding value to the base flock production (FEEDLOT). Lowering UCOP increased profits. Increasing GROSS increased profits, lowering the MANAGE ratio increased profits, and increasing FEEDLOT increased profits.

Total cost and revenue curves were statistically derived for the producers in the study. This analysis suggested that flock sizes were smaller than the optimum profit size. Traditionally producers have selected replacement animals by phenotype and if the animals birth type was as a twin. Producers make little use of financial analysis tools in the sheep business. Our analysis suggests that producers use different tools and criteria for managing sheep for profit. This article is only available online at http://www.ag.ndsu.nodak.edu/ndagres/ndagres.htm

Impact — This research highlights some of the critical control points responsible for profit in ewe flocks. It identifies alternative management measures for producers to use. If adopted, these management measures could increase profitability in the sheep industry.
Audience — Sheep producers, county agents, animal scientists, and economists.

Keywords
Profit, Unit-Cost, Economic, Response Surface

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