Prices, patterns and profitability of feedlots presentation
Sheep feedlot profit margins ranging from 10 cents/head to $14.80/head may be possible in Western Australia (WA) however seasonal price variations for feeder and trade lambs represent a threat to feedlot profitability.
This was one of the many findings from the SIBI commissioned Investor-ready sheep feedlot report, written by Geoff Duddy from Sheep Solutions, which will be presented in further detail on Wednesday 20 September.
The report drew from consultation with industry representatives including feedlot operators in WA and the eastern states.
It investigated in detail sheep feedlot design, establishment costs, infrastructure requirements, environmental impact and effluent management assessments and conducted a benefit/cost feasibility study for low-input, large-scale (from 5000 to 50 000 head) commercial sheepmeat feedlots in WA.
It found that small profits were possible, providing the feeder lamb price, relative to the trade lamb price, was 86% or lower. Profitability of finishing lambs was found to be most heavily influenced by the difference between purchasing and sale prices of the lambs, the time of year that the lambs were traded and how many were put through the feedlot.
The reports suggests that in the absence of contracts with processors, feedlot operators could use historical seasonal price patterns to estimate the value of finished lambs, and thus identify whether purchasing feeder lambs would be profitable or risky for the feedlot.
The results of the feedlot report will be discussed in detail at the department’s Theatrette, 3 Baron-Hay Court, South Perth, on Wednesday September 20 from 1.30pm-3.30pm. More information can be found on the presentation webpage.
The Perth seminar is also available via video conference to the department’s regional offices in Albany, Bunbury, Esperance, Katanning, Manjimup, Merredin, Moora, Narrogin and Northam. View office addresses here.