Cost management and the bottom line –Oct 1986

I’ve waxed eloquent before in this col-
umn about the feeling of excitement and
challenge I have each autumn at the start
of another sheep breeding season. I also
read alot. And something I read recently
in a national farm publication put a severe
crimp in my enthusiasm over the start of
another sheep year.
A farm management consultant (from
Iowa, no less) blurted out in front of God
and everybody that “Sheep can be one
of the quickest ways out of farming. I had
two master sheep producers take bank-
ruptcy in the last two years .. .They had
the production down, but not the produc-
tion costs.”

That was rather point-blank. And my .
itial reaction was anger that in an –
view story spanning the better part at s
pages, there was only one paragraph
about sheep, and that was to badmouth
the business in the vaguest, most gen-
eralized way. Had there perhaps been
some top-notch beef and hog producers
go out of business as well? I had a feel-
ing that the paragraph may have been
thrown in more from a dislike of sheep
rather than a thorough knowledge of the
business.
But the man did raise some valid
points-mainly that in order to stay in
business, you’ve got to earn more than
you spend! And when I thought about it
a moment, I too, could think of several
former master lamb producers now watch-
ing from the sidelines.
I remember when the Iowa Master
Lamb Program was revived back in the
late ’70’s. The express purpose was “to
recognize and publicize excellence in
sheep production.” Perhaps we have
done that. I know I have sometimes been
amazed at the production figures of past
winners … and envious. I’ve also won-
dered how profitable some of those opera-
tions actually were.
Apparently some skepticism is justified.
George Moriarity, the consultant for the
Iowa Farm Business Association, whom
I quoted earlier, says many farmers are
“spendaholics” and that the only way
producers can increase net income today
is to cut costs.
That reminded me of one sheep pro-
ducer who dropped a beautiful 190 per-
cent lamb crop a few years ago-and then

fed the lambs to market on a complete
commercial pellet that cost over $200 per
ton. The lambs did well. But a ration just
as nutritionally sound could have been
put together at that time for less than $120
per ton!

Recalling those earlier years of the
Master Lamb Program, I remember com-
menting once to Iowa State University Ex-
tension Sheep Specialist, Tom Wicker-
sham, (who was head of the evaluation
committee) that the production figures
were certainly impressive and deserved
to be publicized. He whispered back to
me. “But Clark, they’re not making any
money.”

Tom’s successor at Iowa State, Dan
Morrical, discussed ISU’s sheep enter-
prise analysis at the Midwestern Sheep
and lamb Conference in Des Moines this
past July, and to his credit noted that cost
management is the key factor toward suc-
cess in the lamb business. He added,
• ‘What we perhaps see as much as any-
thing is producers wasting too much feed
on the ewe flock.”
Fat ewe syndrome is rampant on Mid-
west farms, and it’s a costly disease
characterized by clanging grain buckets,
bulging hay fevers, and red ink dripping
on lined paper.
Several years ago, a visit with John
Wichern, whom I believe was the first
shepherd to market over a 200 percent
lamb crop in the Pipestone Project,
yielded this gem of wisdom: Said
Wichern, “We feed that ewe real good just
prior to breeding, just prior to lambing,
and during a short lactation. The other
eight months of the year, we think she
does pretty darn well as a scavenger!”
Facility and equipment costs have been
a bane to many beginning sheep opera-
tions in recent years, too. There is a rapid-
ly expanding variety of good equipment
available today that in the right situation
could be very usetul. eut It should not be
a priority item for the beginner. A man (my
Dad) whose wisdom sparkles brighter
with each passing year, often said that in
farming, facilities and equipment that
were too expensive to leave idle, were too
expensive-period!
At any rate, I think our Master Lamb
Producers here in Iowa would stack up
nicely with any in the country. But Mr.
Moriarty’s comments reminded me that
perhaps a little more emphasis on pro-
fitability might be appropriate. Production
at any cost isn’t working now. Perhaps it
never did.

Originally published The Shepherd Magazine October 1986