Farmer Focus: Knowing costs is first step to cutting them
© Richard Stanton Lambing is under way here, albeit only in my daughter’s little flock of Black Welsh Mountains.
I think next year I might lamb some more with them as it’s frustrating to get up in the night for so few.
The main flock starts in April, so by the time you read this we should be familiar with the emotions lambing brings.
See also: How a grazing and stocking overhaul reduced sheep costs
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In the lead up to April, we have sorted ewes into groups while vaccinating. The groups are obvious, with singles and multiples separated to ease the burden on feed costs.
Singles get very little supplementary feeding in comparison with the multiples.
They might get a bale of hay if the weather turns, but the multiples is where most expense is spent leading up to lambing.
I sometimes wonder if singles are more profitable, as the costs associated with them are so much less than multiples. Maybe that’s a project for the summer.
I enjoy working out production costs, and it surprises me how many farmers don’t know how much it costs to produce lambs – and, of course, how much it costs to sell the lambs in the market, too.
These calculations are relatively easy, especially now most farmers need to do their VAT online and input costs into a spreadsheet.
All I have done to better understand the costs is add a few more columns to the normal requirements for the VAT.
So, for instance, when we sell lambs through the market, I add how many lambs were sold, so a quick formula is done to allow me to better understand individual costs.
I have also added categories to costs and allocated them to enterprises. For example, if I was to buy a load of straw for lambing, I would allocate this to the sheep.
I think knowing our costs, and reducing them, are going to be increasingly important.
We are in an industry where most of us are “price takers”, so the only thing we can control is our costs.
We have the tools available to us already and don’t need fancy technology to start this process.
I urge everyone to have a go with spreadsheets and see how much your lambs cost to produce – you might even have some fun doing it!