Finishing Merino lambs in feedlots

Dec 2016

Geoff Duddy, Principal, Sheep Solutions, Leeton NSW

Increasingly merino enterprises are using grain-based rations to finish wether lambs for slaughter, improve ewe weaner growth rates and mature ewe body condition prior to joining and lambing.

Merino wether lambs constitute approximately 25% of our national lamb meat supplies. While historically receiving less per kilogram than crossbred lambs, a continued and growing interest in opportunistic finishing, improvements in Merino lamb carcass shape and meat quality and increased demand for shorter, merino-style wools sees well finished merino lambs compete with traditional crossbred lamb returns.

With lower priced feed grains and hay currently available many producers will look to buy-in or finish own-bred lambs in approaching months. Value-adding grains more so than profit margin per lamb is likely to be the major benefit of finishing these lambs, be it in a feedlot or paddock supplementation situation.

Principles when feedlotting merino lambs are the same as for crossbred lambs. Producers need to be conscious of providing adequate space, shade, shelter, feed and water trough access, a balanced energy and protein rich ration, adequate fibre etc. The merino however generally has a lower feed conversion ratio and may require more feed per unit of live weight gain than crossbred lambs, have lower average daily growth rates, is prone to social stress issues and will have a lower dressing percentage than crossbred lambs.

The Sheep CRC Lamb Finishing Calculator can help producers to establish beforehand the likely profitability of finishing crossbred lambs or merinos within a feedlot. If, once analysed, the risks associated with feedlotting are considered too high and/or if profit margins or grain value adding outcomes considered too low you may choose to simply background feed (supplement) or sell as unfinished lambs.

For example, using the following assumptions a range of profit/value adding outcomes from feedlotting Merino wether lambs can be generated

Assumptions:

• 38-40kg Merino wether lambs, shorn, starting value $100
  (on-farm)
• Target live weights of 52 and 58kg (22.1 and 24.5kg
  carcass weight)
• Cereal grain ($80/$120 and $160/tonne); lupins ($340/t);
  pasture hay ($100/t) with 3% additives ration providing
  11.5 MJ/kg DM and 13.8% crude protein
• Sale values of 535c/kg plus skin ($10)
• Labour, wool income and associated costs were included.
• Lambs vaccinated, drenched, bred on-farm with $3 transport cost to slaughter and 5% sale commission
• Average daily growth rates of 180, 240 and 280g/h/d
• Cereal grain costs from $80, $120 and $160/tonne and overall ration costs of $134, $164 and $194 as fed
  respectively

The above analysis suggests that it may well be worth feedlot finishing merino lambs provided you can achieve reasonably high daily growth rates (> 240g/h/d); cereal grain costs are reasonably low (<$120/t) and finished Merino lamb values are >535c/kg

Interestingly, ration costs and the starting lamb value represented between 16 to 28% and 57 to 69% respectively
of total feedlot costs across all scenarios. Starting lamb values therefore continue to have the greatest impact on feedlot profit margins. The ability however to value add low priced (<$120/t) cereal grains by between 40 to 100% through feedlotting is a major factor to consider when looking to finish lambs in approaching months.

Many producers can successfully finish merino lambs in feedlot systems however risks are generally high and margin for error low. Before embarking on a feedlotting program producers should consider the availability and value of contracts, Merino lamb seasonal price variations, skin values, selling lambs as ‘stores’ and/or supplementing lambs if paddock feed is available.