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ANPR 420-520: Sheepmeat Production and Marketing

Revision Notes

ANPR-420-520 was originally issued in 2007. It was created with funding provided by the Sheep CRC supported by MLA and AWI.

This Module is no longer offered by UNE. In 2012, utilising funding provided by AWET and MLA the module was merged with WOOL 412-512 Sheep Production. The original materials have been retained here as a reference source.

Topic 1: The Australian Sheepmeat Industry

Consumption of sheepmeat varies from country to country, and changes with time. Most of the world’s meat is consumed in the country of origin and only a small proportion is traded on international markets. This topic provides background information on current world meat consumption and trade, markets for Australian meat and some of the characteristics of the Australian meat industry.

Topic 2: Key Markets for Australian Sheepmeat

There are many different market opportunities for lamb and mutton in both the domestic and export markets. The changing attitude of consumers has ensured that more of our customers specify what they want in terms of carcase weight and fat depth through their buying preference. Product specifications are the only way that price signals from consumers can reach producers accurately.

Topic 3: Nutrition of Meat Sheep

This topic covers:

  • the key components of diets for sheep;
  • the importance of the rumen and its microbes in digesting feed components;
  • the key end-products of digestion of dietary materials in the rumen;
  • the principal sources of metabolisable energy and amino acids available to the sheep tissues;
  • define protein quality (amino acid composition) and the factors affecting protein requirements for growth and milk production in sheep;
  • the factors affecting maintenance/production energy requirements of younger and older sheep;
  • the importance of nutrition for ewes in the pre-mating period and during pregnancy and lactation; and
  • the nutritional requirements of pasture-fed and feedlot lambs.

Topic 4: Growth

There is currently a trend towards the use of larger mature-size breeds and strains for meat production. In addition, most performance recording schemes for both meat sheep and wool- producing breeds include some selection for growth. In a self-replacing flock, the larger, faster-growing animals have a greater output in terms of lean tissue produced; but, as they also require more food than smaller animals, mature body size has little effect on the biological efficiency of meat production. The increased food required when running animals of larger mature size is mainly a result of the increased food intake required by the larger dams. Consequently a crossbreeding system in which maternal food costs are defrayed, either by the use of a large-mature-size sire mated to a small-mature-size dam or by an increase in fertility, will result in an increase in the efficiency of meat production

Topic 5: Sheep Health in Meat Production Enterprises

Profitable sheep production systems are largely based on converting grass into either food or fibre. Diseases essentially interfere with this process, rendering it less efficient by impairing the function of the “converter” (the sheep). In most cases (but not necessarily all) the welfare of the sheep is also compromised. This is of singular importance; it must be redressed in its own right, apart from the economic issues historically given primary and sometimes sole consideration.

Topic 6: Sheep Genetics Australia (SGA)

Sheep Genetics Australia (SGA) is the national genetic information and evaluation service for both the meat and wool sectors of the sheep industry. SGA has been developed jointly by Meat & Livestock Australia (MLA) and Australian Wool Innovation Limited (AWI), together with industry. Sheep Genetics Australia has been developed to utilise the world’s most comprehensive sheep genetic database and evaluation service for the Australian sheep industry underpinned by a best practice quality assurance system. SGA acts as a resource for sheep genetic information and improvement through which commercial producers, ram breeders and service providers can interact. It will supplement the skills of ram breeders and sheep classers by evaluating current measurements and providing further information, often on traits not assessable by the eye e.g. reproduction, carcase and internal parasite characteristics.

Topic 7: Optimising Paternal Genetics – Theory and Practice

The genetics of the Australian prime lamb industry has changed significantly over the last 15 years. This change has reflected changing markets, with more demanding end users wanting less fat and more ‘meat’ on their lamb meals. At the same time that the domestic lamb industry has changed its requirements, there has be a huge growth in the export market.

Topic 8: Optimising Maternal Genetics

Productivity of the ewe flock has a major impact on lamb enterprise profitability and stocking rate. Income is from the sale of lambs (determined by the number produced, carcase weight and fat level), skins and ewe wool (weight and fibre diameter). Some additional income is from the sale of surplus cull sheep. The lambing rate of the ewes determines the number of lambs available for sale in an enterprise run at any given stocking rate. The ewe provides half the genes for growth and cascase merit of the lamb as well as all the maternal environment and nurturing. Potential productivity of the ewes for these traits is determined by their genetic merit. The current low sheep population in Australia with high demand for sheep meat is a further imperative to lift productivity of ewe flocks.

Topic 9: Management – Breeding

Approximately 45-50 million ewes are mated each year in Australia. This provides the foundation for a sheep meat/wool industry with a gross annual value of $4.5 billion. A major determinant of this value is reproductive efficiency which is usually measured by the number of lambs marked for every 100 ewes placed with rams (lamb marking percentage). Lamb marking percentages are generally above 80% in all states with the exception of Queensland. Importantly, the national percentage (approximately 82% in 2001 and 2002) has steadily improved, rising a valuable 10% in 30 years. It is important to understand that the marking percentage is a function of ewe fertility (i.e. ewes lambing of those placed with rams), litter size (i.e. lambs born per ewe lambing) and lamb survival (i.e. lambs surviving of lamb born).

Topic 10: Managing Ewes through Pregnancy and Lambing

Targeted nutrition is essential to achieving high flock reproductive performance. Throughout this topic there will be reference to pasture benchmarks required to ensure nutritional requirements are met. These will be described in terms of herbage mass (kg DM/ha) and herbage quality (% DM digestibility). So as to reliably meet these pasture benchmarks, the timing of phases on the breeding calendar must synchronise with the seasonal supply of pasture. The period from mid pregnancy through to lamb marking and weaning is critical to the profitability of the sheep enterprise. The fact that lamb losses from birth through the end of the first week of life can be huge should alert managers to examine all aspects of the production system and put actions in place to ensure that these losses are minimised. This needs to be done in a coordinated way to cover all variables that cause reproductive wastage in the flock.

Topic 11: Weaning and Joining Management

Weaning management is important to optimise the potential for growth of lambs to market. Factors such age at weaning, pasture preparation, parasite control and the setting of targets for liveweight and fat score are all important to achieving a profit from lamb production. For the ewes the interval between weaning and joining is also crucial to achieving a high conception rate at the next joining.

Topic 12: Management – Finishing

Growing lambs require a balance of energy and protein in their diet for optimal growth. In some situations lambs will have to be fed supplements with the intention of maximizing lamb growth to achieve target market specifications. Sometimes it may be more economic to allow slower growth rates and have lambs reach target weights when prices are higher.

Topic 13: Lean Meat Yield

This unit is designed to help you to understand the relationship between lean meat yield and the profitability of a prime lamb business. It aims to provide you with the necessary skills to understand lean meat yield, analyse feedback and to begin to identify methods for improving lean meat yield and the effects of yield on profitability in a prime lamb business.

Topic 14: Pre-Slaughter Management

The pre-slaughter period includes the total time required to move sheep from the paddock to the slaughter floor of an abattoir in preparation for slaughter. The individual components and the lengths of these components vary according to practical and commercial considerations. However included within the list of individual time components of the pre-slaughter period are: mustering, consignment assembly, farm curfew, transport, saleyards, and lairage. Key issues influenced by sheep management during the pre-slaughter period are food safety, animal welfare, meat yield, meat eating quality, environmental contamination, and biosecurity. Such issues influence both the quantity and quality of meat harvested from sheep and potentially, public perception about the sheep meat industry. Quantifying the effects of pre-slaughter management in relation to these key issues allows a better understanding of how to optimise pre-slaughter management.

Topic 15: On Farm Quality Assurance for Sheepmeat

This topic describes the practical on-farm quality assurance measures that producers should consider to minimise the risk of the customer being dissatisfied with the sheepmeat product supplied. Customers all over the world demand food products that are of consistent quality and free of chemical residues and other contamination. It is important to the long term sustainability of markets for Australian products that as all meats are facing continued pressure to be safer, healthier and taste better. Of the factors that impact on these aspects of quality some can be controlled by producers but many others are influenced by downstream actions in the transport, processing, retailing and food preparation sectors. This lecture focuses on the production sector.

Topic 16: Lamb or Sheep Feedlotting

Historically, a few lambs have been grown in feedlots, often by grain producers utilising surplus or damaged grain. During the late 1970’s and early 1980’s there was increased interest in intensive feedlots in Australia although interest diminished due to problems with adaptation to sheep to the diet and confinement and due to marginal profitability. In recent years consumer pressure for a more consistent supply and quality of lamb, drought and poor seasonal conditions and the ability to value-add low prices cereal grain, have all renewed interest in, and the use of, intensive grain finishing systems nationally.

Topic 17: Selecting a Target Market and Meeting Specifications for Sheepmeat

Domestic and export sheep meat markets demand a product consistent in quality and supply. A successful lamb or sheep meat producing enterprise must have a clear series of production objectives, planned marketing strategies and contingency plans to maximise enterprise profitability. Marketing principles require producers to identify client needs or requirements, target a client base that want and are willing to buy your product, convince the client of the value of the product and build relationships with clients through having a sound marketing strategy. While industry product development and promotion has been driven by national bodies such as Meat and Livestock Australia, producers have had to clearly identify their target market in terms of carcase specification to be able to cater for market (consumer) requirements.

Topic 18: Live Assessment of Lambs and Sheep for Sale

When assessing sheep and lambs for sale the aim should be to select those animals within the required carcase weight and fat score specifications. More accurate appraisal of the live animal helps the producer and agent to target specific markets. The traditional approach of visually assessing sheep as a mob or while they are running through the drafting race often results in drafts of lambs or sheep with a 5-8 kg carcase weight range and a wide variation in fat scores. The successful marketing of even lots of sheep requires a professional approach. Being a good assessor means being able to accurately estimate the carcase weight, fat score and skin quality. These skills can be improved by experience and regular abattoir feedback. It is also greatly aided by the use of live weight scales and a good fat scoring technique.

Topic 19: Dual Purpose Sheep Enterprises

Profitable sheep production depends on good pasture availability and efficient conversion to wool and meat. Achievement of this requires skilful grazing and animal management, good sheep genetics and sound product marketing. Striking a good balance between wool and meat production in dual purpose enterprises insulates the producer against commodity price swings. Options include varying enterprise mixes ranging from (a) self replacing Merinos through to (b) first cross terminal meat sire breeds crossed with Merinos and (c) specialist prime lamb production using terminal meat sire breeds over crossbred ewes. Moving from (a) through to (c) results in progressively greater production and income from meat compared with wool. The primary focus of this topic is on sheep enterprise comparisons and appropriate management and product marketing to maximise profit. There are also elements of risk management associated with enterprise mix, management and product marketing.

Topic 20: Key Profit Drivers for Sheepmeat Enterprises

In broadacre farming businesses, the key resource limitation is land. Because land is so expensive it cannot easily be acquired to increase the scale of the business, in addition there is a significant amount of fixed costs that come with the ownership and farming of land which means that to generate an acceptable profit the land must be operating near its economic capacity. The economic capacity of the land will be that point at which additional spending within the area under management brings no higher return than that generated from buying additional area. Optimum profit per hectare is therefore the key objective in the operation of a sheepmeat enterprise

Topic 21: Sheepmeat Marketing Methods

Meat sheep may be marketed in Australia as stud, store or finished stock. This topic deals with both store and finished meat sheep. Until the mid 1970s there was little change to the method of selling or marketing meat sheep .Since then descriptive language has been implemented for live sheep and carcases though AUS-MEAT. The industry has adopted methods to transfer carcase description from farm to retail and back again –eg carcase tickets with information including carcase weight and fatness. During the 1990s the industry began to develop systems for value-based marketing- ie payment on the relative quality of the product received, often based on a grid for carcase weight and fat score. To allow the consistent sourcing and supply of quality product to end-users the industry also developed supply chains or alliances between sectors. Many of these developments occurred because of producer dissatisfaction with the uncertainty and fluctuation of prices and the common lack of relationship between price and quality associated with the traditional auction system.

Topic 22: Live Sheep Export

Australia’s live sheep export trade is focussed on supplying Middle Eastern markets with an increasing emphasis on product quality and market specifications. Large numbers of expatriate workers, increased affluence brought about by the oil industry, cultural and religious values are key contributors to demand. (A small but growing number of live sheep are also exported for breeding purposes to other sheep producing nations. Specific information relating to breed, numbers and value to the Australian sheep industry are not included in this topic). The live sheep export trade exists due to terms set by importing countries. Cultural and religious beliefs have principally driven and led to the development of the trade as we know it today. Live sheep are demanded for religious festivals within the Middle East and are frequently marketed through fresh meat (“wet”) markets. Historically, importing countries have had restricted access to refrigeration requiring fresh meat marketing. This has limited the development of fresh or frozen carcase markets within importing countries.

Topic 23: Innovation for Sheepmeat Producers

Significant gains in both the productivity and profitability of sheep meat production in Australia were made in the last decades of the 20th century thanks largely to innovations made in opening new markets for Australian lamb and developing the genetics to meet these markets. Despite good returns for prime lamb and mutton enterprises relative to other grazing enterprises in recent years, it is critical that the Australian Sheepmeat industry does not become complacent about their current situation. Competition in the animal protein market is strong, both domestically and internationally. To remain competitive with other meat products such as beef, chicken and pork, sheep meat producers need to continue to look towards new innovations and opportunities to differentiate themselves from other protein producers and to respond to emerging trends related to consumer’s perception of the eating quality, health enhancing benefits and food safety of the meat products they are purchasing.

Topic 24: Lamb and Sheep Skins

Skins are a valuable product of the lamb and sheep industry and contribute from 0 to 30% of the total return from lamb and mutton. Lamb skin prices are usually higher in July-September as manufacturers of sheep skin rugs buy their requirements for the entire year over a few months, these skins are normally purchased from the new season lambs. In southeast Australia this coincides with the time when grass seed problems and ultra violet light degradation of the tip are at their lowest. Sheep skin rugs are a high value product exported around the world.

Topic 25: Greenvale – Case Study

This case study looks at a family farm in the South East of South Australia on sandy soils. It examines the problems and successes encountered in both farming and being involved in a lamb marketing company called Limestone Coast Lamb.

Topic 26: Limestone Coast Lamb – Case Study

Guy and Sue Wheal of Beachport SA started Limestone Coast Lamb (LCL). They have been involved with Flockcare and set about trying to receive a premium for their lamb. They invited 3 other like-minded farming businesses to help them fund and run the fledgling business. Our business was eager to be involved. The business consisted of procuring lambs that had been raised under Flockcare conditions, getting them contract killed and then delivering to butchers in our nearest capital city (Adelaide). Butchers pay a promotion levy to LCL, as we supply point of sale material for them to advertise our product. Each producer also pays a promotion levy to LCL for the same purpose.