2019, Volume 16, Paper 3
ISSN: 1449-7875

Are heavy lambs economically sensible?

Alice M. Ritchie – Department of Jobs, Precincts and Regions, Hamilton, and Postgraduate student, University of Melbourne, Parkville. Alice.Ritchie@ecodev.vic.gov.au

Abstract

Current pricing signals for lamb are encouraging the supply of lambs at heavier weights. However, for Australian producers who lotfeed lambs, the decision to target the heavier end of the market specification is not clear cut. Variables such as growth rate, feed costs and store lamb purchase price, as well as sale price, all have an influence on the profit margin of feeding lambs to a range of carcase weights. Using a deterministic model and a partial-factorial experimental design, a series of sensitivity analyses were conducted to assess these relationships. The results showed that in certain conditions, targeting a heavy lamb specification was an economically sensible decision. When sale prices were at least ten per cent higher than the average it was a profitable thing to do. When sale prices were average or low, if at least one other cost variable was low, it was similarly a sensible decision. With volatile pricing across all variables and potentially tightening market specifications, the results of this analysis will play an important role in helping lamb producers determine whether it is worthwhile targeting a heavier weight.

Keywords: lamb lotfeeding, market specifications, sensitivity analysis, lamb price.

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