MILKING MONEY FROM SHEEP -
FACT OR MYTH?

Anthony Hyde FRICS FBIAC operates a farm consultancy practice in Southern England, is in partnership with his brothers at Manor Farm, Wool, manages a 1000 cow dairy unit in Portugal and is a past chairman of BSDA

All good stories have a beginning, middle and end; the same criteria apply to any business whether operated for profit or the enjoyment of the owner/operator. Whilst some may consider that farming sheet for their milk is a little "off the wall", especially in the UK, this is certainly not the case and there are many examples both here and abroad to dispel such an attitude.

The first time I seriously investigated the commercial possibilities of sheep milking was nearly 20 years ago; the same factors were present then as now and they are worth repeating:-

• A paper exercise demonstrates that sheep milking is a highly profitable enterprise, but facts are hard to benchmark against.
• Market research to identify and secure a consistent outlet for the milk as a prerequisite to starting is essential.
• Scale is a very important factor for the commercial operator and the enterprise best suits an existing farm operation where it forms one enterprise amongst others.
• A dairying attitude is a must - it is almost vocational, but then what Livestock enterprise is not?
• The sheep milk operator requires a wide range of skills, or access to them, such as stockmanship, nutrition, marketing and organisation.

For the purposes of this article I will now assume the enterprise has moved from an idea to reality, that a market has been secured for raw milk, sheep are available and that the basic skills stated above are in place. We have, therefore, moved from the beginning to the middle.

What are the factors that will influence profitable milk production and where are the risks to the business? The name of the game is to produce quality milk consistently, which you are paid for regularly, and remember the customer is king.

• Supplier and customer require information on quantity of supply to a timetable - do not try and be exact because climate, livestock ills and other items outside the operator's control will continue to make that difficult.
• Milk is the primary source of income so devote maximum management and labour time to that. All other income - meat, subsidy, wool, breeding stock - is secondary. Important but secondary.
• There is the very significant problem of rearing a large number of lambs from the milking ewes with a high cost of labour and feed and the distressing high mortality rate from lambs reared "on the bottle" from day 3 or 4. We cannot do it but in theory all male and unviable females should be humanely put to sleep at birth - I do not advocate this but that is what the paper exercise shows.
• Feeding the milking ewe is as important as for profitable cow milk production. The ewe requires the correct balance of nutrients to produce quality and volume milk and the sheep milker either has to have that knowledge or buy it in. Green grass, silage or hay may not always be the answer. Do you lead feed your ewes before lambing or do you "buffer" feed your ewes in summer?
• A lame sheep will not milk well because she will not feed correctly; likewise a ewe that is utilising food to look after her body condition will not be converting the optimum resources to milk.
• Whether you deliver your milk to your customer or they collect from you there is a cost of holding the milk, distributing it, freezing seasonal surplus and maintaining hygienic facilities.
• Depending upon the scale of the operation there will be the cost of personnel. If staff are employed you have all the same problems as dairy farmers:-
• Finding and holding speciality staff.
• Providing the back up for holidays, time off and sickness.
• Are they just ,milkers or do they do the feeding? Who rears the lambs? Who makes the forage and who manages the grassland?
• They may be excellent at producing large quantities of milk but do they have any eye to cost?
• If you do the milking yourself what is the opportunity cost?
• Forage production for any livestock unit is of paramount importance because not only can poor quality cost you in extra food buying but it can have a serious and detrimental effect on milk production and the health of the ewe.

Moving now to the end section we need to compare what we are achieving from our milking flock (in financial terms) with others - benchmarking. There is no easy way to judge this because of the disparity of systems that abound throughout UK but I set out below the data which has served me well as a format over the last 5 years and which Imperial College London (Wye) are happy to use in their renowned reference book "Farm Management Pocketbook". The figures relate to middle 2003 before the higher feed prices and at the time of writing we still do not have an answer from DEFRA as to how the CAP Reform (Mid Term Review) and payment of the Single Farm Entitlement is to be made.

In conclusion we are dealing with FACTS and not relying on MYTHS in evaluating viable and profitable sheep milking enterprises. Not only is it possible it is happening. It does take commitment and planning and not inconsiderable skill - but what is different to any successful enterprise? Milk from sheep is viable, it is sustainable and BSDA members provide the evidence that this is the case.

SHEEP DAIRYING COSTINGS

Source: Anthony Hyde FRICS FBIAC
July 2003

1. Price 78p per litre at farmgate
2. Lambing %175. Assume a 300 Friesland ewe flock. Retain 75 ewe lambs for flock replacements.
   Sell 400 finished lambs reared from 2 days old (inc. 10% mortality) at £36.
3. Cull ewes: 20/25% culled at £15/head. (incl. Mortality).
4. Dairy ewes are eligible for 80% of the Annual Ewe Premium; 100% if all lambs are reared to finishing weight.
5. Concentrates. Milking ewes: 200 days at 1.25kg/head/day, 100 days at 0.5kg/head/day; cost £160/tonne. Ewe lamb replacements and artificially reared finished lambs at £36 per head.
6. Forage costs. Quality silage: 1 tonne/milking ewe (or hay equivalent).

Grazing: early grass in March/April; good grazing on leys or pasture; similar for dry stock and lambs.

Fixed Costs per Ewe. Labour (paid) £65; Power & Machinery £15; Property Costs £10; Others £10; Total excluding Finance & Rent £100.

Capital Costs of Equipment. Complete milking unit for 300 ewes (inc. yokes, bulk tank, dairy equipment and installation) £6-£10,000. A small 50 ewe unit can be put together for under £2,500. None of these costs include building works.