USVI Public Records

Document text

Hair Sheep Production in the U.S. Virgin Islands Management Practices and Economic Analysis i | a ee me RS 7) Co a Sa by ta W. Godfrey, Ph.D. L wilt Dawa Ph.D. Ca at ee ee > About the Authors RW Godfrey is a Research Associate Professor and the Animal Science Program Leader at the University of the Virgin Islands Agricultural Experiment Station, St. Croix. G. D'Souza is a Professor of Agricultural and Resource Economics at West Virginia University, Morgantown, WV. This research was conducted while Dr. D'Souza was a visiting agricultural economist at the UVI Agricultural Experiment Station during the Fall of 1999. The support of Dr. James Rakocy, Experiment Station Director, and the data input of Daniel Hogue, Associate Director of the UVI Small Business Development Center and the VI Department of Agriculture, are gratefully acknowledged. The authors alone are responsible for the content. Mention of a trade name, proprietary product or specific equipment does not constitute a guarantee or warranty by the University of the Virgin Islands and does not imply its approval to the exclusion of other products that may also be suitable. Contact Information R. W. Godfrey, Associate Professor G. D'Souza, Professor Agricultural Experiment Station Agricultural and Resource Economics University of the Virgin Islands Division of Resource Management RR 2, Box 10,000 West Virginia University Kingshill, St Croix VI 00850 PO. Box 6108 Morgantown, WV 26506 phone: (340) 692-4042 phone: (304) 293-4832 ext. 4471 FAX: (340) 692-4035 FAX: (304) 293-3752 e-mail: rgodfre@mail.uvi.edu e-mail: gdsouza@wvu.edu Publication design/production by Robin Sterns Table of Contents Introduction. eee. 4 Farm Management... 2. 5 a 5 Pastures. eee b Animal Management ..... 0.022.000 eee 8 PGR ills 6 6s ene a cn cnn ans weemememnm manus 8 HAM « «sc connscnsnresuenansaakeddeega ta sameway q GAMBLE. eevee neue mesonummumnmmesened #255 5G q Replacement Animals... 20.2... 10 Flock Health... eee N FeedandWater.... 20.0020... eee n FI Whe oo 55000245 8 102 4% 2» socenceemmneeme 0 14 NOMAD: « c cnvcceasucases eeequemoresas cesses 1b Economic Analysis. eee Wy] What is an Enterprise Budget? 26. 7] Summary of Results. eee. 1] Establishment Costs. eee. % 1o0-Head Operation 2 eee. 8 360-Head Operation... 19 Annual Costs and Returns... 20 100-Head Operation... 2.2202 20 360-Head Operation... ee. 7) Limitations of Analysis... 22 Financial Feasibility Analysis... 2.2... 22 DERIUTIONS «cee nner es SGhiRRRDDRERBEER RE: 22 ROC. . acavaseecaeceavagceyenuee sng ey © cen 2 4 Introduction Sheep production in the Caribbean is limited to the production of animals for meat with no measurable demand for wool producing animals. Since resources are limited in many areas of the tropics, the use of sheep for meat production is partly based on economics. Sheep can be raised on small plots of land, require less feed than cattle, produce multiple offspring and have a short inter- birth interval. In addition, it is easy for a family to purchase and store an entire sheep carcass as part of their food budget. The environment found in the Caribbean has led to the development of livestock management systems and practices that are unique to the region. Because of the relatively small size of the U.S. Virgin Islands (USVI) there is little land available for growing crops that can be used for livestock feed. In addition, the geographical isolation of the islands makes it cost prohibitive to import much grain for livestock. The majority of livestock farmers on the islands use forage as their main source of feed for animals. Rainfall is limited to certain times of the year and can limit the growth of forages. Hair sheep are ideally adapted to USVI and Caribbean conditions. The predominant breed found in the USVI is the St Croix White, which is a breed of hair sheep. There are also small numbers of Barbados Blackbelly hair sheep. Caribbean hair sheep breeds were developed from animals that were brought to the West Indies from Africa on trade ships. Once established in the region, the sheep thrived on the tropical grasses and, over time, livestock farmers selected animals that possessed traits which made them suitable to the local environment and production systems. Some of the traits that were selected for in hair sheep breeds include an absence of fleece, breeding at all times of the year, prolificacy and a tolerance of internal parasites. In many areas of the Caribbean the amount of land available for agriculture is limited and sheep are the only feasible option for livestock production. However, the economics of hair sheep production in this area has not recently been explored, and enterprise budgets pertaining to hair sheep production in the USVI have not been developed. This report is aimed at providing information on: (a) management practices, (b) initial establishment costs, and (c) annual maintenance costs of hair sheep production in the USVI. This information is directed at helping both existing and prospective sheep producers make better decisions. Budgets are included for two herd sizes: 100-head and 350-head operations. The information used to develop the budgets and the management aspects of the sheep flock was derived in part from the University of the Virgin Islands Agricultural Experiment Station (UVI-AES) Animal Science Program research sheep flock. Production, cost and return information in the budgets are estimates only. Ultimately, each producer has a unique set of circumstances that will necessitate a unique set of budgets. The enclosed budgets can be used as a guide in this process. In fact, each budget contains a column entitled “Your Farm" to facilitate the process of tailoring these budgets to an individual situation. Farm Management Fencing Sheep can be easily con- fined to pastures using wire fencing supported by posts. A common form of wire fence is commonly called goat wire (Fig- ure 1). This material consists of a wire mesh with 6-inch spaces in a square pattern and is pur- chased in rolls of 320 feet. To support the wire fence some type of post is needed. Wood and metal are both acceptable for this purpose. To install wood posts a hole needs to be dug in the ground. This can be done manually with a post hole dig- ger or by using an auger on a tractor. The metal posts are pushed into the ground using a post pounder. Wooden posts have a shorter lifespan than the metal posts. The wire fence is then attached to the wooden posts using staples or to the metal posts using fence clips. Another type of fence that can be used to confine sheep is an electric fence (Figure 2). Electric fences can be powered by standard household current, batteries and/or solar panels. Electric fences can be set up to be permanent or portable. Por- table electric fences are useful in managing pastures by allow- ing the farmer to confine the sheep to a specific area within a pasture for limited duration graz- ing. The fence can easily be moved to give the animals ac- cess to other areas of the pas- ture. In the case of adult rams, it may not be wise to use an elec- tric fence without first condition- ing the rams to the fence and the shock it can deliver, since they tend to be larger and more ag- gressive about getting to grass or females in heat. The fence is used to confine the sheep and also to divide the pastures into paddocks for the rotational grazing system (see Pastures section). Gates should be put into the fence at convenient locations for moving animals or access to the pastures by vehicles (trucks, tractors). Fences have to be maintained routinely to keep them in good condition. Repairs need to be done when there is a break in the fence or posts need to be replaced. Fences can also serve to de- ter predators from entrance into the pastures. In the USVI the most common predator is dogs, although there are some cases of theft as well. Even though no fence is 100% effective in keeping out predators, they do provide a deterrent. Electric fences provide a negative stimu- lus in addition to providing a physical barrier. Maintenance of fences will also help in keeping predators out. Any breaks in the wire or damaged posts should be repaired as soon as they are detected to maintain the integ- rity of the fence line. —, — is Figure 1. Wire fence supported by metal posts. Fence is attached to the posts by metal clips after the posts are pounded into the ground. Figure 2. Electric fence powered by solar panel and a battery. The fence is easily moved to partition sections of the pasture. b Pastures Sheep pastures should be managed in a rota- tional grazing system to best utilize the available for- age. By rotating the sheep through a set of pad- docks the grass quality will increase and some de- gree of weed control will be achieved. It is also a way of using ungrazed pastures as forage banks to assist in getting through the dry season. Pasture layouts for breeding ewes and growing lambs are shown for the small (98 ewes) and large (338 ewes) flocks in Figures 3-6, respectively. In the USVI the major forage species in most pastures is guinea grass (Panicum maximum; Fig- ure 7). Another beneficial plant that is found in many pastures is the legume leucaena, locally known as tan-tan (Lucaena leucocephala; Figure 8). An un- desirable plant found in many pastures is casha (Acacia spp.; Figure 9), which has numerous large thorns. The thorns make the plant unpalatable to the sheep, in addition to causing physical injury to the animals that do browse it. Hurricane grass (Bothriochloa pertusa; Figure 10) is also found in many pastures, but it is a less desirable forage spe- cies due to poor production and nutrient content. Initial pasture preparation should be done to remove any areas of brush and undesirable plants. While doing this procedure it would be beneficial to leave some trees in the pasture to provide shade for the animals. It may also be beneficial to level any high spots or fill in low spots to con- trol water runoff and make it easier to run the fences. After the sheep have grazed a pasture and there is only stubble remaining, it is benefi- cial to mow the remaining grass with a tractor and a bush hog. This makes the entire pasture uniform in the height of the grass and helps to prevent faster growing weeds from overgrowing the desirable forage species. (3.6 acres) a Figure 3. Representative pasture layout for the ewe flock in the small scale operation (98 ewes on 29 acres). The dotted line represents a water line and the gray oval is a portable water trough. (2.5 acres) —«—------¢+->>---=-— Figure 4. Representative 20-acre pasture layout for raising weaned lambs in the small operation (173 lambs per year). (6.3 acres) Figure 5. Representative 101-acre pasture layout for ewe flock in the large operation (338 ewes). (8.78 acres) Figure 6. Representative 70-acre pasture layout for raising weaned lambs in the large operation (609 lambs per year). Stocking rates of sheep on tropical pasture should be maintained at levels that will allow best use of available forage. A average stocking rate of 3.3 head/acre is suitable for the USVI, but this can be adjusted to suit the particular forage avail- ability on individual farms based on rainfall amounts and time of year. Figure 7. Guineagrass (Panicum maximum) showing typical appearance of good pastures in the USVI. Figure 8. Tan tan (Lucaena leucocephala) is a legume found in many of the pastures throughout the USVI. Figure 9. Casha (Acacia spp) is a weed found in many pastures. The spines on the plant (see inset) make it low in palatability and increase the potential to injure animals. Figure 10. Hurricane grass (Bothriochloa pertusa) is low in nutrients and palatability, but it is an aggressive forage species in pastures. 8 Animal Management Breeding Ewes Hair sheep (Figure 11) in the USVI can breed at all times of the year due to lack of significant changes in photoperiod (i.e., length of day light) throughout the year. Due to this trait it is possible to keep the ewes with the rams at all times and produce lambs at all times of the year. Ewes will pro- duce an average of 1.8 lambs per lambing (Figure 12). This may be lower in young ewes lambing for the first time or in ewes older than 7-8 years. In order to take advantage of seasonal markets, such as civil and religious holidays, it would be desirable to utilize a finite breed- ing period when the ewes are ex- posed to the ram. This would lead to the production of a consistent supply of lambs for sale at a spe- cific time of the year. In addition to having adequate numbers to meet market demand, it also pro- vides for a more uniform product by having lambs of similar age and weight at any given time. Figure 11. ¢ Another benefit of using spe- cific breeding periods is the abil- ity to control which rams are bred to which ewes. If more than one ram is kept with the ewes at all times of the year, sire determina- tion is difficult without resorting to costly blood testing. By using single sire mating a farmer can use animals that have been se- lected for specific production traits such as weaning weight, growth and muscling. This will provide op- portunities for the farmer to in- crease the quality of animals within the flock. It is not always necessary to split the flock into smaller groups Figure 11. A group of St Croix White and Barbados Blackbelly hair sheep ewes in a pen. Figure 12. A group of St Croix White ewes and their lambs in a guineagrass pasture. Figure 13. St Croix White ram and ewes in pen for single-sire breeding. The ram is wearing a marking harness to aid in determining when each ewe is bred. to utilize single sire breeding. Since the ewes are in heat at 17- day intervals, on any given day there should be 5-6% of the ewes in heat. For example, in a flock of 100 ewes, one would expect to have 5 or 6 ewes in heat on any given day. If the ram is placed with the entire flock for a limited time period he will have the opportu- nity to breed 5 to 6 ewes each day. In order to keep track of which ram is the sire of which lambs, the ewes can be isolated from the ram for at least a 14- day period in between breeding periods and then exposed to a second ram. This will provide a natu- ral break in the lambing period that can be used to identify lambs from specific sires. In addition, a marking hamess can be worm by the ram and the crayon marks left on the ewes will assist in identifying which ewes a ram has bred (Figure 13). By using a different color for each ram it will also be possible to de- tect ewes that do not conceive and cycle back for breeding by another ram. Breedi in 7 days in 7 days Example for a flock of 100 ewes: 7 days with ram A x 5 ewes in heatiday = 35 ewes bred by ram A Remove ram from flock for at least 14 days 7 days with ram B x 5 ewes in heat/day = 35 ewes bred by ram B 35 ewes produce lambs of ram A Approximately a 14-day break in lambing 35 ewes produce lambs of ram B The cycle can be repeated with rams A and B or new rams can be used at each subsequent breeding period. Figure 14. A group of St Croix White and Barbados Blackbelly rams in pasture. 4 Rams The rams can be kept in a single paddock with adequate for- age for much of the time (Figure 14). The only time that rams would leave the paddock is dur- ing the breeding season or when they are sold. The use of the single sire breeding and rotating rams into the flock will allow for rams to rest between breeding periods. Due to their libido (i.e., desire to breed) the rams may experience some weight loss during exposure to ewes, and the rest period in the ram paddock will allow them to re- cover the lost weight. Lambs The use of defined breeding seasons will lead to defined lamb- ing seasons. Since gestation in hair sheep averages 146 days, the time that lambing will occur for ewes that were exposed to the ram at a specific time can be de- termined. This allows the farmer to allocate resources, such as la- bor, to be available at the time of lambing. If the ewes were exposed to the ram for the first 7 days of 10 June, then the lambs from those matings would be born during the last week of October. This coin- cides with the rainy season on St Croix when the forage availability is high, which means that the ewes would have adequate nutrition to produce sufficient milk to raise their lambs. Lambs can be weaned at 63 days of age with no detrimental effects on their growth. At this point in lactation the ewe will still be producing around 2 Ibs. of milk per day, which is not enough to support the lamb completely. At this time the lambs are already eating grass to supplement the milk from the ewe. The ewe's milk production must be “dried up” in order to prevent udder problems such as mastitis. A method to dry up the ewe at weaning is to place her in a pen with her lambs with- out access to water for 24 hours. After that time the lambs should be removed and placed in a se- cure area and provided with feed, hay and water. The ewes should be kept in the pen without water for another 24 hours and then re- turned to the pasture with the rest of the flock. Withholding water from the ewe for this time period causes her ability to produce milk to decrease, and when the lamb is removed the stimulus to pro- duce milk is also removed. Once lambs reach the target weight of 65 Ibs., they can be sold for slaughter. Of course, some lambs may be kept as replace- ment breeding animals within the flock or sold as breeding stock to other farmers. Replacement Animals Replacement animals are those that are added to the breed- ing flock to replace animals that have died or were culled for vari- ous reasons. It is possible to raise Lamb A weaning weight = 30 lbs. Lamb B weaning weight = 20 Ibs. Example of using a selection index: Average weaning weight of all lambs in flock = 25 Ibs. Index for Lamb A = (30+25) X 100 = 120 indicating that Lamb A has a 20% higher weaning weight than the group average Index for Lamb B = (20+25) X 100 = 80 indicating that Lamb A has a 20% lower weaning weight than the group average your own replacement animals if ac- curate breeding records are main- tained. This is necessary to mini- mize the amount of inbreeding within a flock. By using specific rams within sub-groups of the flock, genetic lines can be maintained and inbreeding can be kept low. Replacement animals should be selected based on their genetic merit as well as their production traits. If the flock is managed as a purebred flock then breed char- acteristics also need to be in- cluded in the selection criteria. Selection indexes can be gener- ated for several traits of interest to producers. An index is a method of comparing an animal's performance in a given trait to the performance of contemporaries within the flock. It is usually based ona percentage scale with 100% representing animals that are av- erage within the group. Any ani- mal with an index value greater than 100 would be suitable for selection as a replacement. Replacement males and fe- males should be selected from lambs that were born as at least twins. Birth weight and weaning weight are two indicators of the growth potential of an animal and should also be used in the selec- tion process. In the case of ram lambs, testicular size should also be considered since it is a good indicator of the potential for that ram to produce sperm cells. Ewe lambs will begin to exhibit estrous cycles by around 7 to 8 months of age, but it may not be desirable to breed them at this age. The animals will be small and still growing, and the extra burden of a pregnancy can suppress their growth rate and lead to a smaller adult size. As a rule of thumb, ewe lambs should be at least 70 Ibs. at the time of their first breeding. Ram lambs will reach puberty at about 7 months of age. Depend- ing on the number of ewes in a breeding group, a young ram can be used for breeding by 10 months of age with very little im- pact on the growth of the ram. Young rams should be exposed to only 15-20 ewes for their first breeding period while adult rams can breed 25-30 ewes. Flock Health In the USVI there are few ani- mal diseases that cause severe losses in sheep. One of the major concerns is internal parasites. Because of the high temperatures and the rainy season, intestinal worms can have a negative im- pact on animal productivity. Lactating ewes are under the additional stress of milk produc- tion and will lose weight during their lactation. Therefore, ewes should be dewormed twice during the lactation. The flock at UVI is treated with a deworming medication at the start of the lambing period and 4 weeks later (Figures 15-17). The lambs themselves are treated at 7 and 11 weeks of age. Once the lambs are weaned and grazing pasture they can be wormed at 6-8 week intervals, depending on the time of year. Since the rainy season is more suitable to the life cycle of parasites and parasite numbers increase, the time between treating animals should be shorter at this time of the year. Young lambs should also be vaccinated against enterotoxemia (Clostridium perfingens C & D) and tetanus (Clostridium tetani) at 7 and 11 weeks of age (Figure 18). Adults should be vaccinated annually. For an example of a dew- orming schedule and medications see Tables 1 and 2, on page 12. Because the hooves continually grow and may not wear down adequately it is necessary to trim hooves on adult sheep. The time when this needs to be done will vary throughout the year depending on how much wear is apparent on the hooves. Figure 15. Oral administration (drenching) of de-worming medication to a ewe. Figure 16. Backpack style drench- ing gun and reservoir used to administer deworming medica- tion to sheep. Figure 17. Common deworming medications used in sheep. All of these can be orally adminis- tered. Figure 18. Clostridia and tetanus toxoid vaccine administered to young lambs and adult sheep. Table 1. Deworming schedule used at UVI-AES Sheep Research Facility. Lambs: - First deworming at 7 weeks of age - Second deworming at 11 weeks of age - Once on pasture, dewormed at 6-8 week intervals, depending on time of year Ewes: - 2 weeks prior to breeding (first time ewes) - 2 weeks prior to lambing (first time ewes) - Start of lambing (all ewes in flock) - 4 weeks after lambing starts (all ewes in flock) Rams: - Every 3 to 6 months as needed Lambs and adult sheep should be randomly tested for parasite loads by a veterinarian throughout the year and treated as needed. Table 2. Common dewormers used in sheep. Commercial Product Compound lvomec® ivermectin Valbazen® albendazole Levasole® levamisole Panacur® fenbendazole Synanthic® oxfendazole Feed and Water As long as there is adequate forage in the pastures there will be no need for supplemental feed for the adult sheep. For a brief time after the lambs are weaned they can be given supplemental feed to aid in their growth (Figure 19). A feed containing 16 % crude protein fed at a rate of 4.5% of body weight per day can produce an average daily gain of 0.3 Ibs. per day in hair sheep lambs. The lambs will also need to have access to some type of roughage at this time, either hay or fresh grass (Figure 20). Sheep will consume approxi- mately 2.5 gal/head/day of water under grazing conditions found in the tropics. A consistent supply of clean, fresh water is important for the fitness of the animals. Water containers should be kept clean to aid in preventing outbreaks of diseases within the flock. The wa- ter needs to be provided so that the sheep have access to it at all Figure 19. Feed bunks made of PVC pipe can be used to keep feed clean and dry. The wooden brackets help to stabilize the bunk and prevent animals from spilling the feed. times and this can be done by using plastic water troughs placed in the pasture (Figure 21). To maintain the level of water in the trough a float valve that shuts of auto- matically can be used. Water can be delivered to the troughs by using buried PVC pipes or by using a large tank to transport water. The source of water and its lo- cation in relation to the pastures will determine what means is used to carry water to the sheep. Mineralized salt blocks should also be placed in the pastures for the sheep (Figure 22). These provide min- erals that may not be available in sufficient amounts in the forage. During the dry periods of the year it may be necessary to provide the sheep with hay when forage is low. This can be done using round bales and either feed- ing a limited amount to the sheep each day or by letting them have unlimited access to the entire bale. The first method will be less wasteful but will require more labor. The preferred method can be determined to suit the needs and resources of individual farmers. _———— ey Figure 20. A round bale of guineagrass hay that can be used to provide supplemental roughage to sheep during the dry times of the year. Figure 21. Water trough and float valve used in pas- tures. The float valve, on the left, helps to main- tain a constant level of water in the trough. Figure 22. Salt blocks are placed in the pastures to supplement the mineral portion of the ration. The old tire rim is used to keep the block off the ground and allow for drainage of rainwater to prevent the block from dissolving too quickly. 4 Flock Records In order to keep track of ani- mals in the flock each animal should have some form of iden- tification. Animals can be identi- fied with tattoos, ear tags or neck ropes with tags on them (Figure 23). Tattoos are permanent and will remain with the animal for its entire life. Ear tags and neck rope tags can be lost. The tags and ropes can be purchased in a variety of colors to help es- tablish different groups within the flock. For instance, at UVI-AES the sheep flock uses all three forms of identification. Breeding ewes have tattoos, ear tags and neck rope tags. Rams have tattoos and ear tags. The tattoo contains the animals ID number as well as the year of birth and is placed in the ears. The ear tag is color coded for year of birth and has the animal ID number on it (Fig- ure 24). The neck ropes are color coded for breeding line and have a second ID number on it. Flock records should be maintained to assist in making management decisions. Ex- amples of flock records for ewes, lambs, rams and sales are shown in Tables 3-6 on pages 15-16. Important information that should be recorded for all lambs at birth includes date of birth, birth weight, sex of lamb, type of birth (single, twin, trip- let), breed and sire and dam identification. This should be done for live as well as dead lambs. If a lamb dies prior to weaning it should also be noted along with the cause of death. High death losses may be due to a disease, parasites or poor management, and records of this can be used to identify the cause and correct the situation. At wean- Figure 24. Figure 23. Plastic ear tags and an ear tagging tool can be used to identify sheep. The neck rope and tag can be used as an additional form of identification. = Figure 24. A young lamb : showing the placement of the ear tag (number 60). The tag should be placed in the ear so that it allows room for the ear to grow. ing the weight of lambs and the number of lambs still alive should be recorded. The dates that the ram is put with the ewes, and the ID of the ram, should be recorded to assist in determining sire of lambs and when to expect lambs to be born. Information on flock records can be stored in a variety of ways. Many farmers keep hand- written records in notebooks. There are also several computer software packages available for livestock record keeping. What information is being recorded and how much of it is recorded will determine the method used. Computer software can perform many different operations on the records once they are entered. Pedigrees can be analyzed, in- breeding coefficients can be determined and selection in- dexes can be generated. Some software can also analyze the financial aspects of the farm- ing operation. 15 (‘232 ‘Ua]OYs ‘Pjos ‘paip “3"1) YOY Ya] que] UOSeay — esNed saee] 420]j BY} SBABD} PY! UBYM QuUe] JO 346}am — ]YBIOM aAee] POY 34} Yo] SQuue] 94] UBYM — BJep SABES] Bujueem ye anije 43}}!] Ul squue] jo soquinu — pouBaMm squuey Yu 72 49} I] Ul SqUUe| SAI] JO Jequunu — Baye Squey 497] Uy] WOg Squue] jo soquunU — Wig squiey que] jeNpiAipul jo Bulueam ye yYyBiam — yybiam Gurueay Poueem sem squue] ajyep — ajep Buus que] jenpiAypuy Jo 7YyBiaM — 7YBiam YG quie] |BNpIAIpul jo XOs — X9S UJog Sem que ajep — aJep YYIG BAIS BY} JO Q] — BIS Wep 94} JO G| — weg quup| 0} peuBisse Joquinu 6e} sea — Be} seg :sBuipeayy uwNnjoD L SZ |OO/LIS| O L [4 (<4 oo/eis ce W OO/LIE | LZOZ | L818 60002 a L L Z SL OOo/eis Sy WwW OO/LIE | LZOZ | L818 8s000% - € € € Le OO/I9ZIv Zs d oo/sziz | S918 LvOL | LO00% € € € 6% OO/I9Ziv 6v d OO/8Z/Z |S9l8 LOL |9000Z% € € € ee OO/I9ZIv 9 W OO/8ziz | S918 LvOL | SO000% (4 (4 [4 (5A OO/I9Ziv 8s d OOILZ/Z | €O%A_ 607A | E000S (4 (4 (4 &% OO/9ZIv 9S d OOILZ/Z | €OZA | 607A | 000% L L L ve OO/I9ZIv 6S d OO/9Z/Z +=S9L8 | 8ZOL | LO00% asned WM S| «8G peuramM Ny = og mM 21eq Mm | XS | aq = IS | weg «Bey SAB97] | SARS]; BARD] Squey] sque] | squiey] Buiuesyy Buruesyy 4yuig 4yyig 4e3 “UONCULIOJU! QU] JO} JELUIOJ P41OD91 YOOY Jo ajdwiexy “py ajqeL OMa YRS 10} pauBaM squue| |/e JO }YHIaM — JYyBIam Bulueom jej}oL peuesm ase squue| Jay Udy JYBIOM Same — Bulueam © 1M OMe YOR JOJ LOG Squue; [|B JO YBjam — WYBiam Yyig [e}OL Poljed Buipaaig 34} Jo Ye}s ay} Je JYBIOM S,aMa — Bulpsesq © IM Buiueem ye aalje squie] jo saquinu — paueam squie7 “YOO]} UIYYM Sul 31}9Ua6 azed!IpU! 0} pasn aq osje ueD Yyyig je sae squue] jo Jaquunu — salle squie] “ul S| ame dnoiB Bulpse.g yoiym sayeuBisep — dnoss Buipeaig wiog squue| jo Jaquinu — uiog squie SyoOY ajdyjnW sue 84904) UBYM UOIJ}eEUBISEp yO — 490)4 W0g Squie] JO Xas ay} SMOYS — SqUIe| Jo xag ame JO Be} uea uo Jaquinu qj — Bey seq Wiog 948M squie] ajyep — ajep Buiquie7 @mea jo e}490u UO Jequinu q| — sequuNU BeyjIeN :sBuilpeayy uNjog (54 es L (4 c | WA OO/ LIE SY co vv Vv Z818 | 99b £8 Z9L £ € € SAW | OO/8Z/Z LZ 9Z o-V Vv LZvOl L6E Sv vit (4 (4 (4 dd OOILZ/Z 2 (4:] +W Vv 6024 | cbr ve 6S L L L 4d OO0/9Z/Z = 82 ov Vv 8ZOL | Zor W5IEM | YBa peueay| ery | Wog | sque7| ajeq | Bujueay |Buipsssg = dno = yj] Bey | 4equiny Bulueam | YvIg 6 squie] | squie] squie] jo xag | Buiquie7 — OW OW Bulpeaig 4eq |Bepjoon [e}OL 12}0L “UONBULIOJU! BM2 JO} S}EWIO} PsOd91 YOOY Jo sajdwexy ‘¢ a1qe, 1b Table 5. Example of flock records for breeding rams. Date | Number) Number | Percent Ear Breeding; Date of Wtat Used for of Ewes of Ewes | of Ewes Tag__| Flock | Group Birth Breeding Breeding | Bred to Pregnant | Pregnant 8156 A A-1 7/23/98 82 6/4/99 30 28 93 9256 A A-3 7/1198 76 6/5199 28 26 93 9054 A A-2 |11/15/98 78 10/2/99 32 31 97 5489 A A-4 10/31/98; 62 2/2/00 35 33 94 Column Headings: Ear tag — ear tag number assigned to lamb Flock — flock designation when there are multiple flocks Breeding Group — designates which breeding group ewe is in. Can also be used to indicate genetic line within flock. Date of birth — birth date of ram Weight at breeding — weight of ram at the start of the breeding period Date used for breeding — date of the start of the breeding period Number of ewes bred to — the number of ewes in the breeding group ber of ewes pregnant — the ber of ewes that conceived during the breeding period Percent of ewes pregnant — the percentage of ewes that were exposed to the ram that conceived Table 6. Example of sales records for a sheep flock. Animal Type of Total Date ID | Weight Sale — Price/\b.| Price Buyer 6/8/99 | 1234 70 meat $1.50 | $105.00 | M. Mouse 3/4100 | 4321 68 meat $1.50 |$102.00 | A. Gore 71100 | 5678 55 breeding| $2.00 | $110.00 | G. Bush Column Headings: Date — date of transaction Animal ID — the number of the animal that was sold Weight — weight of the animal at the time of the sale Type of Sale — indicates if the animal was sold for meat or as breeding stock Price/lb. — the amount you charged for the animal Total price — the amount you received for the animal Buyer — who the animal was sold to Marketing Hair sheep are produced for meat production _ pared to that of the live animal in order to receive because they have no marketable fiber like wool a similar amount of income. breeds of sheep. Young animals can be sold to provide a quality product of fresh, lean lamb. Hair Example: sheep weighing 65 Ibs. will produce a carcass . . weighing 28 to 32 Ibs. Depending on the mar- ne — a ~ $1.50!lb. = $97.50 keting system available, the animals can be sold * lamb sold a . - . based on live weight or based on the weight of Burnone audio the dressed carcass. If they are sold by carcass warcess sale . : 65 lb. lamb yields a 30 Ib. carcass weight, then adjustments need to be made to com- . sold at $3.25/lb. = $97.50 pensate for the lower weight of the carcass com- Sales of young lambs can also be used to pro- vide other farmers with breeding stock. These animals should be of higher quality than the ani- mals that are sold for meat. By only offering high quality animals for sale as breeding stock, other farmers will continue to purchase animals from the flock in the future. Lambs sold as breeding animals can be sold at any weight. Example: Breeding ewe or ram sale 35 lb. lamb sold at $2.25/lb. = $78.75 65 Ib. lamb sold at $2.25/lb. = $146.25 Once a market is established for the lambs, management practices should be used to ensure that a consistent supply of quality product is avail- able to meet the market demands. The use of spe- cific breeding periods can be used to produce a uniform lamb crop at a specific time when the market demand is high (See Animal Management — Breeding Ewes). Economic Analysis What is an Enterprise Budget? An enterprise budget provides a summary of the expected annual costs and returns (either on a per acre basis, as is common for field or fruit crops; or on a unit of output basis, as is common for animals) from producing a specific product such as fish, tomatoes, or, in this case, sheep. There are two types of budgets: a maintenance budget (for all commodities), and an establish- ment budget (for livestock and perennials). These budgets should be developed prior to production of any commodity. Subsequently, they should be updated periodically. An enterprise budget can be used for several purposes. The main uses are to determine the desired sales price; to control cost; to monitor business profitability; and to help identify the break-even point. They can also provide the in- formation needed to conduct a financial feasibil- 7 ity analysis as is done in this bulletin. Thus, at a minimum, an enterprise budget should include: (a) the expected revenues from the specific crop or livestock enterprise (includ- ing cull and/or secondary product revenues and after accounting for death loss); and (b) the esti- mated costs (broken down into variable or oper- ating costs and fixed or ownership costs). Ultimately, costs are an important determinant of profitability; if one does not know what it costs to produce something, it is impossible to deter- mine if it is profitable. Enterprise budgets can assist with this task. The format used for the enterprise budgets developed in this bulletin is similar to that used in standard farm management books such as Herbst and Erickson (1989), and Osburn and Schneeberger (1978). Summary of Results This bulletin contains an establishment bud- get and a maintenance budget for two herd sizes (see Tables 7 through 10, pages 18-21). Each budget outlines the key assumptions and illus- trates the process of deriving the computations, when the latter is not obvious. In addition to the enterprise budgets, the results of the financial fea- sibility analysis are provided. Based on the information contained in these budgets, it appears that sheep production can be a profitable activity in the USVI. We find that there are economies of scale in sheep production; the estimated production cost for the 350-head op- eration ($0.93 per pound) is substantially lower than for the 100-head operation ($1.41 per pound). Furthermore, the financial feasibility analysis (see page 22) shows that while the 100-head operation can be profitable for existing sheep pro- ducers, the 350-head operation is more feasible in the long run. This has implications both for ex- isting producers and potential producers. Table 7. Estimated Establishment Costs for Hair Sheep, St. Croix, USVI. (A) 100-head operation (98 ewes; 2 rams). Item Unit Qty. Price Amt. Your Farm ae ($ / unit Site Preparation (60 acres) tractor 40 $60 $2,400 (varies with site) hours Watering (a) 1” PVC pipe 20 ft. 90 $9.90 $890 (b) trough & float valve | 3 $50 $150 Feeding Troughs (8” PVC pipe 20 ft. 3 $75 $225 cut in half) Shed (lumber & tin roof; 10’x10’ 1 $1,650 $1,650 light fixture) Fencing (a) 4’ goat wire 300’ 59 $150 $8,850 roll _ (b) metal T-posts post 1,728 $5 $8,640 (c) confinement area $1,000 Purchase of Animals Ib. 55 lb. $2.25 $12,375 (98 ewes; 2 rams) Avg. Labor for Establishment hrs. 500 $6 $3,000 TOTAL ESTABLISHMENT $39,180 COST (excluding land) 1. 60 acres of land consisting of a combination of native (guinea grass) pasture and tan tan is available. Also, a water source (well and/or WAPA) exists. If not, an average well cost of $30-50/ft., assuming an average depth of 100-150', amounting to a total of approximately $5,000 (including a $500 pump) can be used. 2. Rotational grazing management (and, therefore, paddocks) will be used. A rectangular (rather than a wagon wheel) fencing system is employed. 3. The 3.3 head/acre stocking rate assumed is for mid-island St. Croix; this will need to be adapted for other areas. For instance, in the East, a stocking rate of 2 animals/acre can be assumed, and, in the West, 5 animals/acre can be used. 4. Additional rams for breeding purposes can be “borrowed” from other farms, as is often the practice. 5. Total costs are rounded off to the nearest $. ee 6. A combination of UVI-AES experimental data, expert opinion, and informal telephone surveys (for selected input prices) is used. 4 ‘pesn si (saoud yndui peyejas 40}) sXerins suoydeje} jewoju! pue ‘uoiuido pedxe ‘eyep jeyuewedxe S3y-[AM JO UONBUIqUIOD Y ‘g "$ JSeuBU BY} 0} JO papuNos oe S}S09 |B}O] “G ‘sonowid ayy UEYO si se ‘SUEY JAYJO WO, ,paMmo.og,, aq ued sasodind Buipseiq 404 sues jBUONIPpY “Py “pasn oq ued o19R/sfeIUR G ‘}seAA OU} UI ‘pu ‘paLUNSse oq UD e10R/sfeWIUe Z JO ayes Burjoojs & ‘sey ey) Ul ‘eoURySU! 104 ‘seer JEUjO 10} pa}depe aq 0} paau ||IM SIU} ‘x101D ‘JG PURISI-PIL 40} Si pouNsse aye1 Buljoojs asB/peay GE SUL 'E ‘pakojdwe si wayshs Buroua} (joey uobem eB UY) JeYye4) JejnBue}e, y “pasn aq |j!M (SyoOpped ‘auojesou) ‘pue) yuoweBeuew Buizes6 jeuoNejoy “7 ‘pasn eq ued (dnd OOS¢ & Buipnjou!) COO'GS Ajeyewuxosdde jo ]2}0} B 0} Bununowe ‘Og |-00} Jo ydep eBesere ue Buiunsse Y/OG-O$ JO 1800 |Jam eBeiEAe ue ‘JOU }] “S}SIX@ (WWM JO/pue |[@M) eOJNOs JayeM B ‘OS|y ‘2|qGeI!BAR S| UR} UB} ue ainjsed (sseiH BoUINB) eAyeU yo UO!eUIqUIOD B BulUIeyUOD ‘puR] jo Se10B GZ “| :suondwnssy (pue] Buipnjoxe) 1SOD Bsc‘ LOLs INSWHSINSVLS3 TWLOL 000‘'9$ 9$ 000‘L "say quawysijqeysy 40} 10qe7 ‘Bay (swel Z| ‘Same gee) ele‘er$ Stes ‘qigs “al sjewiuy jo aseyoing 000‘Z$ BOJE JUSWISUYUOS (9) oor'stg$ s$ 089'e ysod s}sod-] |eyawW (q) 1104 Osr's L$ oSsl$ eel OE 341M 306 ,¥ (2) Bulsue4 (@anyxy 346) OSse'z$ ose'z$ L O@X.0L ‘JOOd UN *P JEqUIN]) PEyS (Hey ul 4nd osr$ SL$ 9 HOS adid DAd .8) SYBno4y Bulpse4 osl$ os$ € aajea yeoy @ YBNO.} (q) SLy‘t$ 06'6$ OSZé HO adid DAd .b (2) Buyayem sanoy (US YIM SeueA) o0sz$ 09$ O€l J0}eRI} (sas98 GZ |) Uoesedald BUS uuey Ano, quiy 89d ‘NO yun, Safe «wey “(swe raG ‘somo see) uolesedo pesy-OSe (g) IASN ‘X1019 3g ‘daeys 4B} 40} sysop yuSWYsIqe}sy payeWiNsy *g 2192) 20 Table 9. Estimated Annual Costs & Returns for Hair Sheep, St. Croix, USVI. (A) 100-head operation (98 ewes; 2 rams). ANNUAL SALES (a) Slaughter lambs Ib. 8,775' $1.50 $13,163 (live @ 65 Ibs. avg./lamb) b) cull ewes (10 eweslyr. Ib. 900 $1.10 $990 (c) breeding ram sales Ib. 825 $2.25 $1,856 (15 rams per year) Total Revenue $16,009 OPERATING COSTS | Pasture maintenance | tractor hrs. 50 $15 $750 Hay purchase 750 Ib. bale 10 $25 5750 Pelleted feed (16% protein) | 50 Ib. bag 56 $8.50 $476 Minerals 50 Ib. block | 8 $17 5136 Vaccines & deworming lamb 180 $1.84 $332 Slaughtering head 135 $4 $540 Labor (part-time; hrs. 1,000 $6 $6,000 20 hrs.iweek) Water, electricity $2,000 & gasoline Interest on operating capital $ 10,484 10% | $1,048 Total Operating Cost $11,532 Returns Above Operating Cost $4,477 FIXED COSTS | Property Tax acre 60 $3.75 $225 Interest on average annual $ $19,590? 10% $1,959 investment (excluding land) Repairs & depreciation $ $21,405° 5% $1,070 Total Fixed Cost $3,254 PRE-TAX RETURNS TO $1,223 LAND & OPERATOR’S MANAGEMENT (total revenue -total operating cost - total fixed cost) BREAK-EVEN PRICE (at current production level) = [fixed cost per pound + operating cost per pound] = $1.4 1/Ib. Notes on computations: ‘annual sales of slaughter lambs is computed as follows: [expected lamb crop - death loss - cull rate - replacement rams - breeding sales] x [average lamb weight]. Thus, [180 - 18 - 10 - 2 - 15] x [65 Ibs.] = 8,775 Ibs. Pores on average annual investment = [beginning investment + ending investment]/2. Thus, [$39,180 + 0]/2 = 19,590. 3amount of repairs and depreciation = total establishment cost (from the corresponding establishment budget) less amounts for site preparation, animal purchase and labor. Assumptions: 1. The following assumptions are made for the sales computation: a lambing rate of 1.8; a replacement rate of 10%; two rams are retained each year for breeding. Finally, a lambing death loss of 10% is used. 2. Rotational grazing management is used. Water consumption rate is 2.5 gallons/animal/day. 3. The 3.3 head/acre stocking rate assumed is for mid-island St. Croix; this will need to be adapted for other areas. 4. Property tax is computed assuming a market value of $10,00O/acre. This, in turn, yields an assessed land value of $6,000/acre. The commercial tax rate is 0.0125; with the 95% farmland exemption on real property taxes, this results in a tax to the farmer of $3.75/acre. 5. Labor taxes (i.e., social security, etc.) amount to approximately 20% of wages. 6. Total revenues and costs are rounded off to the nearest $. 7. A combination of UVI-AES experimental data, expert opinion, and informal telephone surveys is used. a Table 10. Estimated Annual Costs & Returns for Hair Sheep, St. Croix, USVI. (B) 350-head operation (338 ewes; 12 rams). Unit Oty. Price Amt. Your Farm ($/ unit) ANNUAL SALES (a) Slaughter lambs Ib. 34,125! $1.50 $51,188 live @ 65 Ibs. avg./lamb) (b) cull ewes (10 ewesiyr.) Ib. 3,150 $1.10 $3,465 (c) breeding ram sales Ib. 825 $2.25 $1,856 (15 rams per year) | Total Revenue $56,509 | OPERATING COSTS Pasture maintenance | tractor hrs. 175 $15 $2,625 Hay purchase 7 |750 Ib. bale 35 $25 $875 Pelleted feed (16% protein) | 50 Ib. bag 195 $8.50 $1,658 Minerals 50 Ib. block 16 $17 $272 = Vaccines & deworming lamb 630 $0.81 $512 Slaughtering head 525 $4 $2,100 Labor (part-time; hrs. 2,000 $6 $12,000 20 hrs.iweek) Water, electricity $5,000 & gasoline Interest on operating capital $ 25,042 10% $2,504 Total Operating Cost $27,546 Returns Above Operating Cost $28,963 FIXED COSTS Property Tax acre 175 $3.75 $656 Interest on average annual $ $50,694? 10% $5,069 investment (excluding land) Repairs & depreciation $ $44,275° 5% $2,214 Total Fixed Cost $7,939 PRE-TAX RETURNS TO $21,024 LAND & OPERATOR’S MANAGEMENT (total revenue -total operating cost - total fixed cost) BREAK-EVEN PRICE (at current production level) = [fixed cost per pound + operating cost per pound] = $0.93/b. Notes on computations: ‘annual sales of slaughter lambs is computed as follows: [expected lamb crop - death loss - cull rate - replacement rams - breeding sales] x [average lamb weight]. Thus, [630 - 50 - 35 - 5 - 15] x [65 Ibs.] = 34,125 lbs. interest on average annual investment = [beginning investment + ending investment]/2. Thus, [$101,388 + 0]/2 = $50,694. amount of repairs and depreciation = total establishment cost (from the corresponding establishment budget) less amounts for site preparation, animal purchase and labor. Assumptions: 1. The following assumptions are made for the sales computation: a lambing rate of 1.8; a replacement rate of 10%; two rams are retained each year for breeding. Finally, a lambing death loss of 10% is used. 2. Rotational grazing management is used. Water consumption rate is 2.5 gallons/animal/day. 3. The 3.3 head/acre stocking rate assumed is for mid-island St. Croix; this will need to be adapted for other areas. 4. Property tax is computed assuming a market value of $10,000O/acre. This, in turn, yields an assessed land value of $6,000/acre. The commercial tax rate is 0.0125; with the 95% farmland exemption on real property taxes, this results in a tax to the farmer of $3.75/acre. 5. Labor taxes (i.e., social security, etc.) amount to approximately 20% of wages. 6. Total revenues and costs are rounded off to the nearest $. 7. A combination of UVI-AES experimental data, expert opinion, and informal telephone surveys is used. n Limitations of Analysis The following analysis is based on averages for one study location (mid-island), and pertains to the time period during which this study was conducted. Thus, the estimates can be expected to change over time and by location. There are several factors other than economics which can limit the potential of sheep production in the Car- ibbean. Wildeus and Collins (1993) find that nutrition, management, and a lack of genetic di- versity are the primary constraints to sheep pro- duction in the Caribbean. Furthermore, risks in- volved in sheep production can be sizable, but are difficult to capture in an analysis such as this. From a financial standpoint, the implications of risk are that losses are going to occur occasion- ally. This, of course, applies to other areas of farm- ing as well. Strategies to manage risks in sheep production (or any other production activity for that matter) include proper planning (including the development of enterprise budgets such as those illustrated herein before actually undertaking pro- duction), insurance, and diversification. In conclusion, this analysis reveals that for some one willing to incur the potential risks and overcome possible constraints in sheep produc- tion, the potential rewards in the form of profit can be sizable. financial Feasibility Analysis for Hair Sheep roduction (A) 100-head operation: Based on conditions assumed in the budgets (Tables 7 and 9), al- though the 100-head operation generates a small profit on an annual basis, when establishment costs are factored in, it yields a negative net present value (NPV) and, therefore, is financially infeasible in the long run. (B) 350 head operation: Under the conditions assumed in the budgets (Tables 8 and 10), this size operation could be both profitable on an an- nual basis (maintenance budgets), as well as fea- sible in the long run (as indicated by the NPV computations shown below). 1. Net Present Value sheep operation is as follows: Assuming a 20-year planning horizon, the NPV for a 350-head 2. Internal Rate of Return (IRR) for 350-head operation ? 20% Cost of Capital | Net Present Value 8% $105,028 10% $77,602 12% $55,649 Definitions: 1. NPV is defined as the discounted value of a project’s net annual cash flow less the initial investment (i.e., establishment) cost. From an investment standpoint, the higher the NPV, the more desirable the investment (in this case hair sheep). 2. IRR is defined as that discount rate which equates the present value of the project's expected net cash flows to the initial investment cost (in this case, the establishment cost). It can simply be thought of as the project's (in this case, hair sheep) expected rate of return. The higher the IRR, the better from an investment standpoint. Details on NPV and IRR are available in any standard financial management book such as Brigham and Houston (1998). References Brigham, E.F. and J.F. Houston. 1998. Fundamentals of Financial Manage- ment. New York, NY: The Dryden Press. Herbst, J.H. and D.E. Erickson. 1989. Farm Management: Principles, Budgets, Plans. Champaign, IL: Stipes Publishing Co. Osburn, D.D. and K.C. Schneeberger. 1978. Modem Agriculture Manage- ment. Reston, VA: Reston Publishing Co. Wildeus, S. and J.R. Collins. 1993. “Hair Sheep Performance in an Exten- sive, Native Pasture System: A Five Year Summary” UVI Research. Volume 5. UVI Agricultural Experiment Station, St. Croix. Additional Reference Material Hair Sheep of Western Africa and the Americas: A genetic Resource for the Tropics. 1983. H.A. Fitzhugh and G.E. Bradford (Eds.), Westview Press , Boulder, CO. Hair Sheep Production in Tropical and Sub-Tropical Regions with Reference to Northeast Brazil and the Countries of the Caribbean, Central America, and South America. 1990. M. Shelton and E.A-P. Figueiredo (Eds.), Small Ruminant Collaborative Research Support Program, University of Califomia, Davis, CA. Proceedings of the Hair Sheep Research Symposium. 1991. Stephan Wildeus (Ed.), University of the Virgin Islands, Agricultural Experimenet Station, St Croix. The Sheep Production Handbook. American Sheep Industry Association. Englewood, CO. (http:/Awww.sheepusa.org/resource/handbook/ handbook.htm) UVI-AES Animal Science Program (http://rps.uvi.edu/AES/aes_home.html)