How to make a profit from sheep farming

Updated March 23, 2017

Sheep farmers earn most of their money from the sale of lambs and wool. Sale of milk or cheese made from sheep's milk is another source of income. Sheep farmers also can make money by leasing sheep to people who own large plots of grassland. The sheep graze the land, which eliminates the need to mow. Some sheep farmers raise only a few sheep as a supplement to other farming enterprises, or they breed rare types of sheep for sale to other sheep farmers. To profit from sheep farming, you need to reduce your costs as much as possible.

Maximise the use of pasture. According to the University of Minnesota Agricultural Extension, or UMAE, feed accounts for about 70 per cent of the total cost of raising sheep. Allow your sheep to graze. Buy feed in bulk when prices are low, and weigh the feed so your sheep eat only what they need.

Learn basic veterinary skills. Veterinary costs are the second-largest cost of raising sheep, the UMAE says. Trained farmers can perform simpler veterinary tasks, such as vaccination, deworming, castration and docking. Keep basic medicines on hand so you do not have to call a vet for minor ailments. This will help you reduce costs and increase your profit margin.

Use pasture management techniques to reduce the number of parasites the sheep are exposed to. Preventing parasites will help you reduce the costs associated with treatment.

Wean two lambs each year for each ewe, instead of one. This will reduce overhead and increase efficiency. Weaning two lambs per ewe will increase your feed and veterinary costs, so you need to make sure these costs are offset by increased profits from selling more lambs.

Determine the best way to sell your lambs and sheep. Large auctions may offer good prices, but it may cost you more to ship your livestock long distances. On-farm sales may offer better prices than auctions. Time your sales to coincide with peak demand; e.g., at holidays such as Easter. Consider marketing your lambs and sheep directly to consumers through farmers' markets or a farm shop.

Use all tax deductions allowed by law. Deduct allowable expenses such as feed, veterinary costs and breeding fees. File a Schedule F with your farm tax return to deduct livestock expenses. Understand the best method of depreciation to use with livestock and how to establish yourself as a "for profit" farm according to the Internal Revenue Service. You may want to hire an accountant who specialises in livestock accounting to assist with your taxes.

Things You'll Need

  • Pasture land
  • Industrial scales
  • Basic veterinary medicines
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About the Author

Since graduating with a degree in biology, Lisa Magloff has worked in many countries. Accordingly, she specializes in writing about science and travel and has written for publications as diverse as the "Snowmass Sun" and "Caterer Middle East." With numerous published books and newspaper and magazine articles to her credit, Magloff has an eclectic knowledge of everything from cooking to nuclear reactor maintenance.