Margali's Griffin Wood Ranch

Margali

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I caught all the babies for a 1 month checkup. I also introduced the ladies to halter. They were not amused. The ramlings are growing well. Hattie's has almost caught up weight wise to the ramlings 2 weeks older. She definitely doesn't have a milk supply problem.
2024-03-04 Lamb Weights.png

I need to get a walk on scale soon if my back keeps acting up. I know just who can weld me one...
 

Margali

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OCD and nerd alert!
How do you figure out the cost basis per ewe so you know what profit is made? I know price will be set by local market but it would be nice to know if I'm loosing ground.
Option 1: What I did last year with only 3 ewes
Sale price of lamb - Sum(avg. monthly feed for ewe from ram in - lamb weaning) = profit

Option 2: Lambing Group Basis
Sale price of lamb - sum (Cost of feed and supplies for herd from ram in - lamb weaning) / number of lambs weaned = profit per lamb
-That would spread cost of dead stock across all remaining lambs.
-How would you do that with more than one breeding / lambing group?
 
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Ridgetop

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I am confused by your question. Are you asking what a lamb should sell for to make a profit? Or how much income the ewe has to produce to offset the expense of keeping her? Or how to determine how much it costs per animal per year? Or how to figure if a particular ewe is worth keeping?

If you want to find the cost of keeping your sheep flock, do not figure in the purchase price you paid for them originally. You will figure that out later.

Instead, you need to figure how much it costs you per animal in feed, winter hay and concentrates (bag feed), minerals, bedding, vet costs including worming, meds. syringes, vaccinations. You can also figure in how much water if you pay for the water otherwise figure expense of pumping from your well. You need to know how much water a ewe normally drinks when she is open, when she is pregnant and when she is lactating. This will also vary according to the season of the year. A lactating ewe will drink about 4-5 gallons of water per day.

You can figure the cost of all feed, wormers, vaccinations, syringes, ear tags & usable items per year. Deduct the amount of all feed, wormers, etc. you have left after the year end. That will be the cost of keeping your flock. Then figure the amount you made from selling lambs. You cannot deduct a loss on the dead lambs you bred since according to IRS you have nothing in them. The amount of feed and expenses you have in the lambs you are selling will be included in the annual cost of the flock.

The amount of $ you realize from sales of lambs will be gross profit less auction % and yardage charges or advertising if you sold privately. The amount left over will be your net to compare against the cost of keeping the flock.

That amount of income from sales does not break down per animal. If you want to see if a ewe is paying her way, remember the Shepherd's Rule - one lamb for the flock, one lamb for the bank. You need an average of 2 lambs per year per ewe to maintain IF you are able to graze most of the year. If you are buying all your feed (feed lot situation like me) you will not make any money on your lambs no matter how many you can produce. On the other hand, for the first couple years you can file a farm return with all losses, and it will help with your tax obligation from other sources. Then you must show a gain of at least $1.

All the sheep, equipment, housing, non-usable goods (like syringes, tags, etc.), fencing, etc. should be on the list of depreciable items. The depreciation helps with taxes even though it is not income.

I am not sure what exactly you are asking.
 

Margali

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@Ridgetop What lamb has to sell for to have a profit. AND, how much income a ewe needs to produce to offset expense of keeping her. If I do as you suggest just for period from bred until sold, I break even at $450 each of the 4 ram lambs. If I go from when I sold previous batch in March, it would be break even at $523 for each. Accounting is the worse kind of math!
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Baymule

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I use the laundry basket method. All money realized goes in the basket. All expenses pull money out of the basket. Then I dig in my pocket to add more money to the basket to cover expenses. LOL

In Lindale, I finally realized a small profit, there was money in the basket at end of year instead of an I.O.U.

Starting all over. Fence, #1 heavy expense. Barn. #2 heavy expense. Hay and feed. Trying for first place as #1 expense.

I’ve been retaining ewes to build my flock. So not much in the way of sales so far.

Seriously I like your computations and tracking expenses. You are also on the building fence mode. Mo’ money.
 

farmerjan

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You cannot divide the costs by only the 4 ram lambs to sell. Any ewe lambs have value... If you keep them, then they are not generating income at that point, but they have to be figured into the value charged against the ewes. It is no different than if you went out and bought replacements. So, if you take the 2,100 and divide by 7, the total that the rams need to bring is $300 to make it a $0 cost against the ewes costs for the year. You have to also figure in feeding those retained ewe lambs until they provide a lamb/s... and they become a productive part to "pay the bills"..
Fencing and such is considered a capital improvement and can be charged against them on a 5 or 10 year basis. You gotta have it up front, but it will be there for more than a year... and it will all add value if you were to sell unless you wait 40 years and it is all falling down and in disrepair and has totally been depreciated out.
Actually in some ways, @Baymule 's way of doing it is a basic way... but you should allow for xx amount of dollars for the start... not counting the fencing or land purchase,,,, and then try to pay the "daily " expenses and make a "profit" after 5 years. You are not going to break even in less than 3 unless you hit it so perfectly...
If we had bought cattle 3 years ago, and they were producing calves to be sold now we would be showing a profit which would be a very short term return on investment. That is charging everything against the cattle EXCEPT the land and the cost of the fencing... that is infrastructure and is depreciated in a different way on the taxes. Because this is a long term project.. we now charge all costs against the cows, because the value of the land grazed is the same if it is rented/leased pastures, or it is owned value. That's costs to make hay, gow corn for silage, you name it.... and it is right about $800/ per year to keep a cow here in Va now. If you only charge feed/grazing/meds etc... it is in the $5-600 range...
 
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