RED HOT livestock prices has translated to the highest ever profit generated for southern prime lamb flocks in a quarter of a century, a comprehensive benchmarking program shows.
Aggregate Consulting's Beef and Prime Lamb 2021 Benchmarking Review does indicate, however, that there are gains to be made in production efficiencies that could boost profitability in lamb operations.
Prime lamb flocks benchmarked $31 of profit per dry sheep equivalent last year.
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The program involves 70 farms from the south eastern corner of Australia, including NSW, Victoria, South Australian and Tasmania.
The key differences between the most profitable enterprises and the rest came from lamb production per DSE.
The top 20 per cent of performers produced 11.6 kilograms/DSE against 9.5kg for remainder of the database. That equates to a 23 per cent difference.
Consultant Sandy McEachern, speaking in a Meat & Livestock Australia webinar, said the largest contributor to the difference in production per DSE was lamb growth rate to sale - 270 grams per day for the most profitable 20pc of farms versus 225g/day for the remainder.
Summer was the biggest handbrake on lamb growth rate to sale, and that comes back to a systems issue - lambing dates and target sale, he said.
While 2021 was the most profitable year in 25 years of benchmarking for lamb producers, the result was actually not that much higher than 2011 where it was $28/DSE.
Interestingly, prices last year were 30pc better than 2011 but profits were only 10pc better.
The substantial differences in costs - in the most profitable enterprises they were 8pc lower - was driven predominantly by labour, a theme which also emerged in beef benchmarking, Mr McEachern said.
The data shows that increasing scale is helping lamb enterprise to find cost efficiencies.
"A reasonable cohort are now making $900 to $1000 per hectare of profit from prime lambs, which is a good outcome historically speaking," Mr McEachern said.
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Shan Goodwin
Shan Goodwin steers ACM’s national coverage of the beef industry. Shan has worked as a journalist for 30 years, the majority of that with agricultural publications. She spent many years as The Land’s North Coast reporter and has visited beef properties and stations throughout the country and overseas. She treats all breeds equally. Contact 0427686187. E: s.goodwin@austcommunitymedia.com.au
Shan Goodwin steers ACM’s national coverage of the beef industry. Shan has worked as a journalist for 30 years, the majority of that with agricultural publications. She spent many years as The Land’s North Coast reporter and has visited beef properties and stations throughout the country and overseas. She treats all breeds equally. Contact 0427686187. E: s.goodwin@austcommunitymedia.com.au
