Alan Westerfield is asking for people’s math on sheep. He said he made his money raising sheep, and he’s heard some crazy numbers by “blowhards.”
I think he is responding to this recent video by Birchfield Farming:
But maybe he’s talking about my videos too.
Now, if you ask people who do rotational grazing, almost universally they recommend starting with sheep if you want to make some money. Cows just make money slower, or require more acreage to make it all work. If you had acreage, though, and you could run sheep on it, you would make way more money running sheep.
Let’s go over the math according to my best estimates. My numbers are not perfect. Plug in your own numbers and get your own results. If you change the numbers a little bit, the results won’t change much, but if you change them a lot, it will obviously change by a lot.
For simplicity’s sake, I’m going to assume a cow-calf operation and a sheep-lamb operation (which is the only thing people do with sheep, besides breeding rams and ewes and guardian dogs.) All in all, these are good baselines for basically anything to do with sheep or cattle. The cow-calf guys make about as much as the stockers do, after all.
If you are grazing like I am, then the only real question is how many sheep versus cows can you run on the same grass? This touches on the concept of AUs — Animal Units. I base my AUs on 1 AU = 1 cow / calf pair, but I think the “official” standard is based on a milk cow of a specific weight.
I have seen various numbers but for St. Croix, Katahdin, and Dorper, and crosses of the above, which is what most people in the South are running for meat sheep, it’s going to be about 8x as many sheep as cows.
Note that the meat sheep here are smaller than the wool sheep you have seen and heard about. Those sheep eat more grass because they are bigger, and their lambs are bigger too. No one runs an operation doing wool sheep trying to make money in the US that I know of. It’s just too expensive to shear sheep versus the price of wool.
Now, each cow will give you (more or less) 1 calf per year. Sheep, on the other hand, give you something like 1.5 or 1.7 lambs per lambing. This means that 50% or 70% of the ewes will give you a twin. But that’s not all. If you need money, you’ll probably push your ewes to give you 3 lambings in 2 years — 1.5 lambings per year or lambs every 8 months. So all told, you can get 2.5 as many lambs per ewe each year than calves per year per cow.
Let’s say you sell your calves at 500 lbs, and your lambs at 80 lbs at the end of the season. That means each calf is 6.25 times as heavy as a lamb at sale.
The sale price varies over time. As of May 2024, it looks like the selling price of calves is $2.50 per pound, and lambs are $5.00 per pound. That means that sheep sell for twice as much as calves per pound. Prices fluctuate a lot, but I think estimating that sheep get twice as much per pound over cows is more or less consistent.
Combining the average weight and average price, each calf brings in 500 lbs x $2.50 per lb = $1,250 and each lamb brings in 80 lbs x $5 per lb = $400. Let’s round the numbers out and say whole calves are worth three times as much as a whole lamb.
OK, let’s put all the numbers together.
Each AU of sheep will give you 8 ewes per AU x 2.5 lambs per ewe x 80 lbs per lamb x $5 per lb = $8,000 per year.
Each AU of cattle will give you 1 cow per AU x 1 calves per cow x 600 lbs per calf x $2.50 per lb = $1,250 per year.
Thus, sheep are 6.4 times as profitable as cows.
Let’s say I have 200 acres and I can run 0.5 AUs per acre. Running only sheep will give me $800,000 a year, while running only cattle will give me $125,000 a year. Maybe I split it 50/50 and run half sheep and half cows. This is recommended for pasture fertility and animal health. That will give me $400,000 from the sheep and $62,500 from the cows for a total of $462,500.
This is not the end of the story, however. Let’s talk about growing your herd or flock. Will your flock grow faster than your herd, and if so, how much faster?
Heifer calves take 2 years before they are ready to breed back (comfortably.) You can probably get a heifer calf to give birth at the 18 month mark, but it costs the heifer in terms of development and isn’t recommended unless you really, really understand cattle nutrition.
Sheep, on the other hand, are ready to breed back in the first year. That means a lamb that is born in January is going to give you lambs the next January. However, if you are breeding ewes 3 times per 2 years (every 8 months), then the ewe lambs won’t breed back until 16 months (1 1/3 years) have passed. They will miss the breeding in 8 months and not be ready until the second breeding after they are born. That is, unless you are just letting the rams run with the ewes all the time, in which case it only takes a year.
In concrete numbers, if you try to expand your herd as fast as possible, with sheep you get 2.5 lambs per ewe per year x 0.5 ewes lambs per lamb / 1.33 year to mature = 0.94 ewes per ewe per year. That’s a 94% increase per year.
For cattle, you get 1 calf per cow per year x 0.5 heifers per calf / 2 years to mature = 0.25 cows per cow per year. That’s a 25% increase per year.
These kinds of numbers in terms of growth and profit are frankly unheard of in the stock market. If I had a stock that grew at 94% each year, I would likely end up in prison for running some sort of ponzi scheme. Even 25% consistent growth year over year is ridiculous.
To understand how amazing these growth numbers are, we look at the doubling time. This is the amount of time it takes for the numbers to double. For a 94% growth rate, this is practically 1 year. You are doubling your flock every year. For a 25% growth rate, it takes about 3 years.
To put this in perspective, if I kept growing my sheep at the maximum rate, after 10 years, I would have 755 times as many sheep. If I started with 100, I would have 75,500! For cattle, after 10 years I would have only 9.3 times as many cows. If I started with 10 cows, I would have 93.
Obviously, your land and forage on that land is your limiting factor. I would need 755 times as much land to run 755 times as many sheep.
The culling rate becomes very important if you are trying to grow your numbers. If I cull 10% of my sheep each year, then I am only adding 0.84 new ewes each year. With sheep, you might want to aggressively cull like this. If you don’t you may run into severe problems later. With cows, however, culling rates of 10% are unheard of. Maybe it’s closer to 2% or less.
This 10% culling rate may seem unimportant, but it compounds on itself. After 10 years of aggressive culling, I will “only” have 455 times as many sheep. Hopefully those sheep are super healthy and robust and perfectly adapted to my land and techniques, however. Culling 2% of the cattle herd will leave me with only 8 times as many cows.
These are averages. Some years you will have a severe drought and be forced to sell a significant number of your animals. Some years times will be good and you’ll probably decide to buy more cows or ewes.
The key concept to all of this, the underlying idea is that you can get these numbers for FREE if you have them graze on pasture almost exclusively. If we run out of cows, sheep, or money — we can get more cows, sheep or money to eat our grass and make more money from them. But with no grass, we don’t have anything. By rotationally grazing sheep and cattle, and by running them side-by-side, we can maximize our pasture fertility and maybe crank up our stocking rates from 0.5 AUs per acre to maybe 1 or even 2 AUs per acre! Also, animal health is significantly improves and to top it all off, recent research suggests animals grown with regenerative techniques have a higher nutritional value.
One final note — why isn’t everyone running sheep? The answer is very simple. Sheep take a lot of work. You look at the “big sheep” farms with thousand and thousands of sheep, and you see that they have lots and lots of workers to help manage the sheep. Even a few hundred sheep requires assistants and constant work to keep the sheep healthy. Here in the US, the average age of the farmer is quite high. Cows are easy for old people to manage. Sheep are impossible. Only young people really have the strength and stamina necessary to handle them successfully.
In my case, I bought many of my sheep from my friend who is at least 20 years older than me. He just can’t run the sheep anymore, it’s too much work and he fell behind in maintenance and then bad things started to happen. I, on the other hand, am still fairly young and I can do things that need to be done. My youth is compensating for my inexperience.
Sheep also require much better infrastructure. You perimeter fence needs to be better. You need livestock guardian dogs. You may even need working dogs to make them manageable. Your pen design needs to be flawless. You need to stay on top of the flock but at the same time you can’t work them constantly. These are all things that old people simply can’t do as well as young people.
In short — you will make a lot more money with sheep than cows, but you are going to have to work a lot harder for it. The reason why sheep are expensive is because there are not a lot of people able to do that work in agriculture.
I imagine that if a bunch of young people got into agriculture and started flooding the market with sheep, we’d see prices stabilize to where sheep aren’t really much more profitable than cattle anymore. Enough to justify the extra labor, but not enough to justify learning how to run them. At what price does it become a wash? $0.78 per pound or $62 per lamb. Add in some additional expenses due to labor, and maybe lamb in the future will sell for $1 per pound at best.
It used to be, historically, that lamb and mutton was the go-to meat for Americans. This is still true in the rest of the world. We Americans are weird. I don’t really know why Americans stopped eating lamb and mutton and switched to beef, or why beef is so much cheaper than lamb and mutton, but I have two great theories. One is that the Texas cattle boom, combined with Chicago meat packers and New York consumption made beef the “American” meat of choice. The other is that returning WWI vets who were forced to eat unpalatable, poor quality canned mutton grew to hate the flavor and it spread to their children and grandchildren, etc…
Regardless, I think the future is that lamb and mutton will become cheap and plentiful and common again. But for now, in the US, sheep are extremely profitable to graze.