xt7b8g8fgr6j https://exploreuk.uky.edu/dips/xt7b8g8fgr6j/data/mets.xml   Kentucky Agricultural Experiment Station.  journals kaes_circulars_004_612 English Lexington : The Service, 1913-1958. Contact the Special Collections Research Center for information regarding rights and use of this collection. Kentucky Agricultural Experiment Station Circular (Kentucky Agricultural Experiment Station) n. 612 text Circular (Kentucky Agricultural Experiment Station) n. 612  2014 true xt7b8g8fgr6j section xt7b8g8fgr6j By Zack C. Saufley, Joe E. Fuqua, and George B. Byers
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Circular 6I2
COOPERATIVE EXTENSION SERVICE
      AGRICULTURE AND HOME ECONOMICS

 
 I C I ·
Sheep R¤1s1ng as ¤ Pr0f1tc1b|e Enterprnse
BY ZACK C. SAUFLEY, JOE E. FUQUA, and GEORGE B. BYERS
The sheep enterprise fits well into the farming program of many
` Kentucky farms. Sheep use resources that compete little with tobacco
and other farm enterprises. They are a good income producer and
generally produce higher average returns per dollar of feed and
pasture than do the dairy, beef, and swine enterprises, yet sheep
numbers in Kentucky continue to decline.
THE SITUATION ON KENTUCKY FARMS
As of ]—an. 1, 1967, the estimate of ewes 1 year of age and older on
Kentucky farms was 129,000, which is only 14 percent of the 907,000
' A ewes on farms in Kentucky in 1942. Only in 4 out of the last 21 years
have sheep shown an increase over the preceding year. This decline
in sheep and lambs is not unique with Kentucky since the United
_ States as a whole has been declining in sheep and lamb numbers. Not
since records were Hrst kept in 1867 have there been fewer stock
I sheep on farms and ranches than the ]an. 1, 1967 report shows (Fig.
1).
KENTUCKY  U- S·
(Thous. heed)   l   (Thous. heed)
1,000 i 1 Q 1 40,000
1 I “ 1
  u. s. __ l
800 p _,»-.-.___;__< ____,»•'; ··.__· `
~-·’ 1 ' 1 '~._ 30,000
` l 1 Q
1 ‘ ‘ \
l 1 ` 1
600   / 1 \_
1   Kentucky l N" zo ooo
400 1 1 l
  , l 10,000
ZOO ; I ,
0 l 0
1950 1955 1960 1965
Fig. `I.—-Sheep and lambs on farms, January I, in Kentucky and in the United
States.
3

 The decline in Kentucky has been at a greater percentage rate than ,
that in the United States as a whole. The decline in sheep numbers in _
Kentucky over the past 20 years has continued without regard to price
changes. This is shown by the decline in numbers of sheep in Kentucky
since 1961, even though lamb and wool prices generally have been
rising.
The decline in sheep numbers in Kentucky and the contention of
many farmers that the sheep enterprise has been their most stable and
consistently profitable enterprise do not appear economically consistent.
For this reason, a study was made by researchers at the University of »
Kentucky to evaluate the role of sheep in Kentucky’s agriculture. The
following information was taken from the study, “Economics of Sheep
Production on Central Kentucky Farms,” by ]oe E. Fuqua and George
B. Byers, University of Kentucky Agricultural Experiment Station
Progress Report 102 (1961).
The objectives of the study were to point out; (1) the advantages
and problems in sheep production as viewed by farmers; (2) the use
of labor, capital, and land in sheep production, and the extent to which
any one or more of these resources may limit sheep production; (3)
the returns from and costs of the sheep enterprise; and (4) the pro- ‘
duction and marketing practices which contributed to higher returns.
Complete records were obtained from 151 farms. The three types of
farmers interviewed were: (1) those who raised sheep at the time of _
the study, (2) those who had discontinued their sheep enterprise 10
years prior to the study, and (3) those who had started sheep enter- `
prises in the 1() years prior to the study. The Inner Bluegrass area was
chosen for the study for two reasons: first, the concentration of sheep
is greater in this area than in any other in the state (48 percent in
1959), and second, the soil type and topography are relatively con-
sistent throughout the area, thus giving opportunity for more similarity
in resources and farm organization.
ADVANTAGES AND PROBLEMS IN SHEEP PRODUCTION
Advantages
Good profits, supplementing income, and timeliness of income are
the economic advantages often given by farmers continuing or acquir-
ing sheep enterprises. Sheep raising is also advantageous because it
keeps the farm free from weeds and bushes and utilizes resources that
would otherwise remain unused.
The farmers’ statements concerning sheep as a profitable enterprise
were substantiated in the study. Net returns to management averaged
$5.44 per ewe in 1957 and $4.07 in 1964. Even in 1961, when lamb
4

 _ prices averaged lower ($16.80 per cwt) than in any other year since
1945, net returns averaged $1.47 per ewe. Returns t0 farm-owned and
farm-produced resources (income above cash expenses) averaged
$18.82 per ewe in 1957 and $18.53 in 1964. In the two-year period
(1957 and 1964) for which costs and returns were analyzed, all sheep
flocks in the study made a return above cash expenses, thus making
some returns to farm resources (Fig. 2 and Table 1).
RETURNS PER EWE
. $50.00 _,_ ·
z' ` GROSS CASH RECE|PTS*
} \
,’ \`/ PER EwE—l95?
,/ ~__ emu 1954
25.00 ~`
`\
\ "`—-_
\\ _1
2900 `\ TOTAL COSTS PER EWE**
`\ I9G4 und l95?
L ~
‘ n 5. 0 0 `· ` _ *
é _ _ _ _
4 I 0.0 O
_ -\ NET RETURNS T0
,/__ ~\ MANAGEMENT PER EWE
/ ,' "~_ ` I957 and l964
I I
5.00 / ,· ‘~,\.\/
, 1 ‘. ~
/ ll "" § -   —
[ ll, ` ` _ ~ _ ` _ L
/ lv "
O
O »‘ 5O IOO |5O ZOO 250 BOO
NUMBER OF EWES IN FLOCK
Fig. 2.-—-Receipts, costs and returns per awe.
° Receipts were practically the same for 1957 and 1964.
°° Sheep purchased excluded.
Problems
Thirty-two percent of the sheep producers in the study did not see
any disadvantages in sheep production. Dogs, foot rot, and parasites
were the serious problems facing the other 68 percent of the sheep
producers. Some other serious problems mentioned were tronhle
at lambing time, difliculty of combining sheep with other livestock
5

 Table 1.—-Sources of Income and Financial Summary per Ewe in 1957 and 19641
 
Income Per Ewe Income Per Ewe
Items in Lambing in Lambing —
of Flock Flock
Income 1957 1964 Items 1957 1964
Sale of lambs $19.59 $19.60 Total value of
Sale of ewes 1.32 1.55 production $27.74 $27.80
Sale of rams 0.14 0.17 Cash expenses 9.52 9.27 ‘
Sale of wool 4.73 4.56 Returns to farm
\Vool incentive payment 0.95 1.01 resources 18.22 18.53 .
Insurance claims 0.10 0.10 Pasture charge 3.24 3.39
Cross cash receipts 26.83 26.89 Housing charge 0.59 0.59
Increase in inventory 0.91 0.91 Value of farm-produced —
Sheep used in home Y 2 feed 6.22 7.33
Total value of Returns to labor, capital,
production 27.74 27.80 and management 8.17 7.22
Interest on investment 1.03 1.03
Returns to labor and
management 7.14 6.19
Value of family labor3 1.70 2.12
Net returns to
management 5.44 4.07
I Based on 106 flocks. Actual data used for 1957 and adjusted to 1964 price level.
I Less than one cent per ewe. Only two farmers slaughtered lambs for home usc.
3 Family labor was valued at $0.50 per hour in 1957 and adjusted to 1964 price level.
Labor in 1964 was 124 per cent of 1957 or an hourly rate of $0.62. »
enterprises, and labor problems. In most cases, these problems in-
dividually were not serious enough to cause discontinuance of the
sheep enterprise. However, the accumulation of problems and/ or the ‘
fear of problems causes producers to sell their Hooks. ·
COSTS OF THE SHEEP ENTERPRISE
Total costs averaged $22.30 per ewe in 1957 and $23.73 in 1964
(Table 2). Total costs are divided into two major categories; cash
expenses and noncash costs. Cash expenses are those “out-of-pocl'r<   ii . ,A  
·» .,;;.-3 .e "     ‘-.44 . e?F¢$·2¤%$?`  i ~ (
‘   ._.··;;;:Z.'.¤.\‘— · _ 5   . {’»J;,\',‘* n-  J
/ .. A `§*~*=· —=\‘»¤-·-S#’;:· uc;  ~&~· %v:.2!.”J*  s E
Fig. 3.—More lambs per ewe increase the profit.
resources averaged $18.22 per ewe in 1957 and $18.53 in 1964. Many 1
times this is called net returns without regard for the farm resources
and their alternative uses. Income minus cash expenses equals the
amount a farmer has to put in the bank for any single year, but after
so long he will have to pay for some of the resources considered free.
Net returns to management averaged $5.44 per ewe in 1957 and
$4.07 in 1964. Here, net returns mean the charges have been made for
all resources, except management. If a person could have hired labor,
rented pasture, rented barn space, bought feed, and borrowed capital
at the rates used in the study, he would have averaged $5.44 per ewe
in 1957 and $4.07 per ewe in 1964 for his management of the flock
(Fig. 2).
Size of flock had an important effect on net returns to management.
In 1964, flocks of 100-150 ewes averaged $7.00 in net returns per ewe.
while flocks of fewer than 50 ewes averaged only $0.34 per ewe and
flocks of more than 200 averaged $1.56 per ewe. Economies of scale in
8

 feed and labor costs had major effects on net returns. Most of the
· economies of scale in feeding were obtained at a Hock size of 50 ewes,
‘ even though the trend of decreasing costs continued as size of Hock in-
creased. This would indicate overfeeding among the smaller flocks,
probably because of the availability of home-produced feed and that
it is considered a free resource (Fig. 2).
Labor costs per ewe in 1957, both hired and unpaid family labor,
varied from an average of $3.12 for Hooks of fewer than 25 ewes to
$1.23 for Hocks of more than 200 ewes when unpaid family labor was
valued at $0.50 per hour. With the $0.50 per hour rate adjusted to thc
1964 price level, a rate of $0.62 per hour, the variation was $3.86 to
_ $1.53 per ewe for flocks of fewer than 25 and more than 200 ewes
(Fig. 4).
The average cost per ewe of some items such as electricity, in-
surance, transportation, insecticides, and veterinary services had a
( COSTS PER EWE
$ns.oo
x
I
\
. ¤2.5o X
• "
\‘ \" FEED COSTS PER EWE
( l0.00 \ \` (home produced ond purchcsed)
s \` I964 und I957
\ `~~.. /
\ . " ‘ ——~-
7.50 \.` _ ‘%------_____
T _ * `
i _   ` §
500 LABoR cosrs PER awe
(family und hired)
L964 und |957
2.50 &/
` ` —  
0
50 I00 I50 200 250 300
NUMBER OF EWES IN FLOCK
Fig. 4.-—Feed and labor cost per ewe by size of flock (Plotfed points are class
interval averages.)
9

 tendency to be lower in the small and large flocks than in the medium-
sized flocks. Lambs raised to a marketable size numbered about 8
more per 1()0 ewes which were valued at $2.07 more per ewe on
farms using electricity with their sheep enterprise. On the farms using
electricity, the cost was $0.23 per ewe. Therefore, this practice ap-
pears to be quite profitable}
PRODUCTION PRACTICES
Many management practices influence returns to the sheep enter-
prise. By averaging net returns and other income-related factors on
farms where a certain practice was performed or not performed, some
indication can be gained as to the profitability of that practice. A
Breeding Practices
The flocks that had Southwestern ewes averaged much higher net
returns per ewe than those that had either Northwestern or Native
ewes. In comparing the Southwestern and Northwestern ewe flocks,
the Southwestern averaged higher in all income factors. The factor
with the most pronounced difference was the number of lambs raised
per 100 ewes, which resulted in $3.18 more per ewe for the South-
western flocks. Lambs from Native flocks were slightly higher in -
weight, in price per 100 pounds and in value per lamb sold, but were
lower in number of lambs per 100 ewes and wool per head sheared.
Net returns per ewe for Native flocks averaged less than for the other
two groups, but much of this can be attributed to the higher costs as- ~
sociated with the smaller, native flocks.
Age of the ewes in the breeding flock had a marked effect on all
the income-related factors. With the exception of wool sheared per
head, the values of all the factors increased when greater percentages
of ewes in the Hooks were less than 5 years old. A good culling and re-
placement program which would maintain at least 75 to 90 percent of
the ewe flock of less than 5 years old appears to be a profitable
practice.
Ewe flocks that were flushed before breeding resulted in an average
of almost four more lambs per 100 ewes. Flushing is increasing the
feed available to the ewe just prior to and during the breeding season.
The most common and convenient method is to put ewes in a fresh
lush pasture.
lBctter farmers use more advanced technology. Therefore, some of the
increased profit from the usc of electricity may also be attributed to other pro-
fitahlc practices.
10

 Use of purebred rams resulted in $0.82 greater net returns per ewe.
Two practices commonly recommended t0 sheep producers—tagging
ewes and shearing rams before breeding—had no positive effect on
most of the income-related factors.
Feeding Pructices
The practice that had one of the most pronounced effects on in-
come-related factors was the grazing of a cover crop. Flocks that
grazed a cover crop raised 11 more lambs per 100 ewes; the lambs
weighed 2.8 pounds more per head and sold for $0.95 more per 1()0
pounds. The value of lambs raised was $3.09 greater per ewe for the
flocks that grazed a cover crop.
· Creep feeding did not appear to be profitable. Net returns per ewe
were $1.06 higher in Hooks that did not creep feed. The flocks with
creep feeding had about the same feed cost per ewe as those without
crep feeding, but the Hooks without creep feeding raised seven more
lambs per ewe. The better feeding of ewes during gestation and
lactation probably accounted for the major difference in number of
lambs raised per ewe. This provides some insight as to where the
emphasis should be in the feeding program.
General Prcctices
f The flocks that were drenched three times or more averaged higher
returns than those drenched zero, one, or two times.
Flocks in which lambs were castrated and docked averaged higher
` in all factors considered.
MARKETING PRACTICES
Successful sheep production in Kentucky depends primarily on the
marketing of lambs in the spring and early summer. Spring and early
summer marketed lambs have a seasonal price advantage. During the
past 15 years considered in this study, the highest average price for
Kentucky lambs occurred 7 times in May, G times in june, and once
each in February and March.
The importance of timing in marketing is made even more evident
when average weights and prices of lambs are observed by month of
sale (Table   Lambs sold in May averaged higher than in any other
month in weight per lamb (90.3 pounds), in price per 100 pounds
($24.40), and in value per lamb ($22.04). Lambs sold in April and
june were well above the yearly averages. The average price per 100
pounds stayed strong in ]uly; however, a drop in average weight of
11

 lambs marketed lowered the value per lamb to almost $1.00 less than ‘
in ]une.
A combination of lighter lambs and lower prices from the first of
August through the fall months caused the value per lamb to drop
sharply. The lowest average value per lamb during the year was
$15.18 in October, which was $6.86 per lamb less than the May
3.V€I`3.g€. .
Table 3.-Number, Percentage, and Average Weight of Lambs Sold by Months, -
and the Effect on Price per Hundred Pounds and per Head on 106 Farms in 19571
 
Price Value -
No. % \Vt. per for Lambs per
Date Sold of Lambs of Total Lamb, Lb. per Cwt. Lamb
April 229 2.6 85.6 $22.75 $19.46
May 697 7.8 90.3 24.40 22.04
]une 1,980 22.2 86.6 22.39 19.39
]uly 2,060 23.1 81.7 22.64 18.50 1
August 784 8.8 76.6 21.23 16.25
September 841 9.4 78.1 21.15 16.53
October 682 7.6 77.4 19.61 15.18
November 357 4.0 80.9 21.43 17.33
l)eccmber 147 1.6 78.2 22.30 17.44
After ]anuary 1 200 2.2 83.9 22.71 19.06 _
Unknown 957 10.7 2 2 — V
All Lambs 8,932 100.0 82.2* 22.16** 18.223
lPrices for lambs were so near the same in 1964 that the distribution of prices and
value would be practically the same.
2 Weights and prices were not obtained on all of these and averages were used.
fl lncludes only the lambs for which weights and prices were obtained. V `
PROFITABILITY AND VARIABILITY OF SHEEP COMPARED
WITH OTHER LIVESTOCK ENTERPRISES
Sheep enterprises compared very favorably with the beef, dairy,
and hog enterprises during the 1946-64 period on the basis of adjusted
gross returns per dollar of feed (including pasture). A pasture main-
tenance charge of $2.15 per acre plus taxes was assessed to each
enterprise on an annual unit basis on each farm. Adjusted gross re-
turns per dollar of feed for sheep ranged from $2.73 in 1951 to $1.69
in 1961 and averaged $1.98 for the 19 years. Beef averaged $1.90 for
the period, with a range of $1.21 to $2.61. Dairy averaged $1.69 with
a range of $1.29 to $1.90. Hogs averaged $1.78 with a range of $1.42
to $2.09. Some farm management studies charge pasture maintenance
at a much higher rate. giving a return to pasture as a crop. It pasture
were charged a higher rate, the returns per dollar of feed for the
major forage-consuming livestock enterprises would be lower relative
to the hog enterprise.
12

 ;` T tt `* E7
  A__    »  
  ig? 3; . {  TT
  ‘·=¤   =» A . .. 
Q       i `Q ;r ‘f i` i\ °~ i`¢"   ism    *
`   ii;  G, ` '   ` _ pgp   {  
  f_ 1_‘%; · _· ¥`_ M  ?!§!4~`~ — " ;._»·*r!
I hi he , . · —?'*•f _,;_j;***i   gf _
. ` rk ` »g`x.i§§®,, {  QQ   gg `•-·.`
Fig. 5.—F|eeces of large size and high quality add to the profit of the sheep
I'3IS€I’.
Price variability is another measure of the stability of an enter-
' ]_)I`iS€. TllG p1`G(lOH1lDHl]t type of Sl]G€]_) €l]tGI`pI`lSG ill K€IltllCl