Monday, August 8, 2011

Last lamb gone and what good did it do us? A cost-benefit analysis

I took the last male lamb to the butchers yesterday, the poor wee mite. His ultimate destination is our friend Lois's freezer. This final sale made this a bumper year for sheep sales. We've sold a total of six animals, one two-year old, two shearlings, one fat lamb, and two weaners.

How much did we get from this activity? About $430. Gross.

How much did we net? I don't want to think about it. Really. But I will.

This many sheep sales represents at least part of the cumulative production of the last three years. If I were to add the gross receipts from last year and the year before, and then subtract the costs and divide by three, making some allowance for the extra shearlings kept on this year (current "inventory") minus those we had at the beginning of the three years (inventory at the beginning of the time period), I might get close to a number that represents our losses or profits.

I keep a spreadsheet of costs versus revenue from which I compute our income taxes each year. If I count only those expenses that go towards sheep feed of one kind or another, and exclude the cost of fencing and barn, pick-up, tractor and trailer maintenance, I get about $3,000 of expenses for this three-year period.

Against which I get about $750 of sheep and yarn sales.

Meaning we lost about $750 per year on sheep.

To be honest, I thought it was going to be worse.

As the owner of these few acres, and caretaker of a few more, I tend to think I'm going to have to spend some money on grass and brush management, which right now is done primarily by our sheep.

How much would it cost me in lawn-mower and brush-hog maintenance and depreciation and gas to do this work myself? I have no clue, to tell you the truth. I hate mowing lawns.

But to begin with, I'd need a riding mower and a brush hog attachment for the tractor, and I'd need to calculate depreciation and expenses for both. A mid-range riding mower starts at about $1,500, the brush hog would be about $900, and our small Kubota tractor, which is second hand, cost $6,000. That's $8,400 of capital expense, which would probably average about a ten-year lifetime, or less given our land is so rough.

Call it $800 a year, plus another $50 in gas and oil.

And I don't account for our own meat consumption anywhere in this estimate. I'm not sure I eat $750 worth of lamb and mutton.

But how much do I eat? I would guess I eat lamb or mutton products perhaps once a week.

If I were to estimate that consumption as a third of a pound per week for 52 weeks, then that's about 17.5 pounds per year, which at $3/pound is less than $60 dollars.

So my $750 of excess sheep-care expenses is offset by $850 in avoided lawn and brush-management expenses, as well as $60 of meat.

There's also the sheeps' contribution to the gardening effort. We make between two and four tons of compost per year, but I think the majority of the nutrients in that material come from the pigs. Still, we do grow an awful lot of tomatoes and potatoes and onions and other crops in that garden.

But this is getting too complicated. I was breaking even at the previous stage, sheep vs. lawn-mowing and meat expenses.

I think I should quit this calculation while I'm ahead, don't you? All this calculating helps me justify my existence as a sheep farmer, but it doesn't help poor Molly out there, still bleating for her lost lambie. I'd better go feed her, to distract her from her loss.

She'll feel better -- they always do.

Sheep have short memories. As a result, they don't do cost analysis.

And that's probably a very good thing.

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