My Financial Reality of SHEEP FARMING: Investment vs. Profit

[@theShepherdess]

DISCLAIMER: This video should not be used to replace legal or professional counsel. Use your brain, know your pocketbook, and make sure that at least one of the two has something in it at all times ;). -the Shepherdess

[@cg5434]

I agree for sure about getting professional counsel BEFORE getting into the farm/ranch business. People need to speak with an accountant that has experience with farms and ranches. Each state is different and has different tax requirements. I have had a successful cattle ranch for over 20 years, but have had a lot of growing pains along the way. People need to understand the livestock markets are constantly changing and great profit years are pretty rare. 2015 was the last great year I have had. The rest have been either good or barely breaking even years. Weather and the cost of feed are also constantly changing too. All of these factors have a direct impact on your livestock operation. I have owned sheep and can confirm they are more profitable than cattle if you can keep them alive. Goats can be profitable, too. However, sheep grow faster than goats, and therefore are more profitable unless you have a good market for goats in your area. My advice for new farmers and ranchers is pretty simple. Do your homework before getting into this business. Talk with experienced farmers and ranchers who have a good track record. Their wisdom is priceless. Look at the cost of everything associated with your operation. Look at what the returns would be. Figure out if you have time for the operation you are wanting to have. Animals require care 365 days a year and a simple weekend trip to visit family somewhere requires careful planning. So keep that in mind.

[@mikecanaday5731]

My wife and I started with a sheep enterprise 20 years ago. We Started with 33 half Dorper Ewes. We now have 4000 ewes and 5500 Boer Goats. I think this qualifies me for commenting on operating on large scale. This enterprise has always been more than a business to us it’s a life style. We are not overnight successes but everything we have today is from the sheep and goat biz and we never dreamed we would be this successful. We are first generation farmers/Ranchers and what I have learned is the secret is to run at scale. Small time will keep you poor. Dream big and grow wealthy. Just my 2 cents.

[@theShepherdess]

Incredible operation! I think you are right on the gross revenue level. That said, I’m still convinced there is more than one way to skin a cat. Holding out hope for the opportunity I see on a small scale. -the Shepherdess

[@Rick_Sanchez_C137_]

Definitely pluses to a larger farm. A tractor payment will be the same no matter how many bales it moves a day. Feed and seed is cheaper in larger quantities. With land leases so cheap, only being able to afford to BUY a house on five acres does NOT preclude you from ranching on 500…. All that said, she is right that trying to ranch on a reasonable scale without going into massive debt to start (especially for first timers who don’t know all the little ins and outs and issues) is the smart way to go… and it doesn’t mean someone can’t jump from 100 head to a thousand head the following year, it doesn’t have to be incremental; but doing anything the first time should be done with training wheels…. Going all in, going into debt on a large ranch, adding more debt for a couple thousand head of an animal you’ve never cared for before, and accruing even more debt for a year of feed, storage buildings, birthing sheds, fencing, tractors, trucks and trailers to get animals to slaughter……. Well that’s almost as foolish as getting a student loan for a couple hundred thousand dollars to go to UCLA and study gender studies and think that degree is going to take you places…..

[@nicholasdobberpuhl800]

Are goats or sheep more profitable?

[@mikecanaday5731]

What are more profitable goats or sheep? The answer is it depends but as first generation ranchers we only get the land no one else wants. It’s not very productive and cattle would likely starve to death but goats and Dorper sheep will get fat on. Goats are more work but the meat will sell for $3.50 a pound or more. When lamb is $2.25. You can sell a grass fed light lamb say 75 pounds at 4 to 5 months old and the goat will be eight or nine months old for the same weight. Selling the lamb at 4 months old gives you a whole other payday. When it comes to Goats demand for goat meat far exceeds supply and It is quite likely prices for goat meat will continue to increase.

[@theShepherdess]

@@mikecanaday5731 Thanks for this great explanation! It's a question that keeps coming up and this is a really insightful answer.

[@GB-ts5pq]

You are unbelievably helpful to an aspiring farmer. I love the math and science behind your operation. It is so interesting and easy to understand. Keep up the work because people like me GREATLY appreciate your channel and your work!!

[@theShepherdess]

This comment really encouraged me! Thank you for taking the time to leave it. See you in the next video! - the Shepherdess

[@Swordzilla]

so glad I found your channel. been reviving a 100 yo farm and asking so many questions that you address. still working my way through all your videos. keep it up! and thank you.

[@goflyfishin]

Great to see your early success. We are praying it continues and you reach your goal in record time. Keep up the good work and thank you for sharing, and the countless hours documenting for all of us to experience with you.

[@theShepherdess]

So encouraged by your comment, Matt! I will keep sharing, Lordwilling, and your prayers mean everything! -the Shepherdess

[@sarahthuray4497]

In JESUS CHRIST name amen

[@hillbillywisdom777]

Your analytical and financial talents are incredible. Be Blessed.

[@mohameddoccali7872]

It's a big success for the first year . And there's a priceless bonus: the experience .

[@theShepherdess]

Yes! Very true about the experience. Thanks for commenting! -the Shepherdess

[@MrTraveler33]

The opening photo and bit was great 👍. Really had me smiling and laughing thankyou.

[@jerryburwick3433]

Lord please Bless Grace and let her business soar to greatness

[@theShepherdess]

Thank you, Jerry!!!

[@donmartin7728]

A few questions if you don’t mind. 1. Appreciate/depreciate of livestock. Would you start depreciation once the ewe and ram reach their half life? 2. With lost and replacement ewes. Do you count the death as a loss and the replacement as a cost? Mostly for tax purposes, and there is still a cost associated with the replacement ewe. Even though the ewe was born and raised with the flock, the ewe had an expected market return. Also the replacement ewe will not start making a return until she lambs. That cost needs to be covered, your time and energy are not free.

[@theShepherdess]

Good questions, Don! As far as technically counting losses and gains, I leave that to my business accountant. This video shows my personal record keeping process that gives me a rough gauge of where my operation is at. I put a flat value on the head of each ewe that is born on my pasture. If that ewe dies, I deduct her full value as a loss. If I cull her and the sale price does not match that flat value, I again count it as a loss. I spend about 12 hours on pasture every week. This 12 hours per week is about how much time I used to spend at the gym. Since I started farming I cancelled my $300/month gym membership, spend less time commuting to my workout, and am in better shape than before. It may be an unconventional way to approach it, but it keeps my head in the game and that’s one of the most important things. Thank you for commenting! -the Shepherdess

[@kestrelkade]

@@theShepherdess what other business expenses are not accounted for? (You mentioned a business accountant. Anything else?) 🙏🏽

[@bandabanderos]

Well laid out video. I like the statement-if you bleed money on a small scale, you’ll bleed it on a large scale. Way to go figuring out process and efficiency instead of just throwing money at something that doesn’t work

[@theShepherdess]

Thank you!

[@calebfast8088]

Love it! Super helpful. Can't wait to get going on this myself!

[@mangeraalbert7982]

Well explained, go high watching from kenya

[@darrenmott4640]

Hey just a thought that would help your flock is maybe a loose mineral formula for sheep, because mineral block, are what they say “trace mineral “

[@theShepherdess]

Thanks, Darren! I plan to cover this in a video next week but I currently run 2 varieties of loose mineral. -the Shepherdess

[@brianrotach3153]

Fish or cut bait.., very well said. Chase the dream. Great job

[@rickayers3150]

Very good for the first year. When I teach I tell people all the time that ( you need to know where you are at , to know where you are going. ) Great job.🙂

[@jayhay1237]

Excellent job. You are bound to be wildly successful. A couple of quotes come to mind from people way smarter than me: "You can't manage what you don't measure." "Better is better before bigger is better." My operation is 90% hay centric, 10% lambs. So my sheep accounting is as simple as selling hay to my sheep instead of the hay market. Bottom line? My sheep pay me a 30% premium over market price for the hay I produce that they consume over six months. They are on pasture about six months. (* +/- based upon market conditions over 10 years)

[@anthonyburke5656]

I really enjoy your channel, a pity you don’t have a larger property, land is VERY expensive in your area (it’s way lower in ours). IF you ever get more land, look at Australian White Sheep.

[@joniindo6127]

Glad I bought sheeps and then found this in YT. Warm regards from Indonesia.

[@pattimeredith9621]

Celebrating with you. Love the creativity in presenting numbers!

[@joelcox504]

Your aspersion is inspirational iv worked as a craftsman ' im thought what a beautiful bussniess to run is farm sheep' your approach is amazing

[@treesplease4053]

Very very impressive, here in the west of ireland we are breeding sheep for ever but 95% of farmers dont know their numbers like you do. In the west here a big flock is maybe 200+, but there are not that many as farms are smaller in acreage. We often tend to work off farm maybe two days a week locally. Many of us get work still based around the Agri area like in the local Agri merchants or helping the local Veterinary clinic. Im twenty years in sheep, love it to bits and the bit i love are the animals. You are very intelligent and if anybody can do it you will. Look after yourself personally also and mind your health it is very demanding and sleep loss around lambing time is draining as you move up in numbers. Keep going, Thanks.

[@daviddaniken7248]

Where do you account for your biggest asset (the land for pasture)? You're either renting, buying, or using for free. If using for free, it should be given a fair market value to give a true representation on the balance sheet.

[@theShepherdess]

Standard rate for pasture rental in my area is $12-24 per acre per year. I am on 23 acres of pasture which is $276-552 annually. Hope this helps and thanks for commenting! -the Shepherdess

[@daviddaniken7248]

@@theShepherdess here that would be $2,300 to $3,000 in rent every year depending on the quality, location, facilities, and access.

[@theShepherdess]

@@daviddaniken7248 Yes, this area is a hidden gem that is quickly being quickly unearthed. It's likely going to look different in the next three years. Land prices have increased 50% in just the 3 years we have lived here. Thankfully my family is generous with the rates and I'm working on a profit based lease agreement... I won't have much expense on the land front until I begin generating some real profit over cost.

[@andreytrigubko4361]

@@theShepherdess How much would you have to pay in Texs per year as an owner of the lend? Would does revaluation of the land works in reference to taxes to be paid.

[@swamp-yankee]

@@daviddaniken7248 do people actually pay that much for grass, or are you living in a row crop area?

[@SherKhanMMAfitness]

Hey, you’re so awesome! Congratulations

[@DanKlein_1]

That is impressive. A lot of new business startups can expect a couple years before a return in revenue.

[@theShepherdess]

It's gonna look like a bright red year on my actual tax records (big bro doesn't yet recognize ewe lambs as profit like I do...lol). I was encouraged overall, though! -the Shepherdess

[@tobinschlegel4695]

Looks like it is going well. Keep up the good work!

[@theShepherdess]

Thank you Tobin!

[@Digger927]

About on par with my first year as well. Very nicely done and well presented in an articulate manner. My second season (this season) has gone much better as far as growth and ROI. Stands to reason as the flock grows and sheep mature that overall gains would increase. Last year I only had 5 ewe lambs and 7 ram lambs...this year I had 19 ewe lambs and 14 ram lambs (2 lost ewes lambs besides). As long as a shepherd can successfully market the product and losses are minimal...it's pretty hard to mess it up too badly. Of course that's the real trick isn't it, lol. Now if I could just depreciate out all my infrastructure and equipment costs out to say....300 years....I'd be wildly profitable. lol

[@theShepherdess]

300 yrs... Isn’t that the truth!! 😂 I’m looking forward to lambing 2022. I was carrying a lot of non/producing ewe lambs in 2021 so it’ll be interesting to see if my crop increases as dramatically as yours. -the Shepherdess

[@seangaffney1363]

this is inspiring, do you have a video on how someone could get started with very little.

[@markgrehlinger7117]

I am so puzzled when I see negative comments coming from viewers that say" I really like what you say Miss shepherdess, but I'm not a fan of Joel Saladin", huh??? What could possibly make someone say something like that...it's beyond my comprehension.

[@brettpayton6286]

So curious. You held back 7 ewe that you talked about here. An you said how they added value. ( which I do agree ) how did you calculate their value? Base of average market price or what? Thanks an keep it going. I love utilizing your ideas.

[@theShepherdess]

Yes! I have them the value of what it would cost to replace them right now. 👍🏻

[@jrgee173]

I JUST FOUND YOUR CHANNEL ON ACCIDENT, I REALLY DO LIKE IT, I WANT TO START MY FARM WITH THE SAME KIND OF SHEEP, I'M IN SACRAMENTO CALIFORNIA, I HEAR DIE A LOT, I BOUGHT A LA MANCHA BABY GOAT FIVE DAYS AGO IT DIED, AND A FEW BABY COWS DIED TO. I'M LEARNING A LOT FROM YOUR CHANNEL. VIDEOS.

[@Mansahx]

Hmmm. Something’s to think about. Thx👏🏾🙏🏾🙏🏾

[@dc0145a]

Good on you 👏 👍 Data is crucial nice job 😇

[@theShepherdess]

Thank you!! -the Shepherdess

[@MM-hm2wy]

Well done. Thank you for sharing!

[@kestrelkade]

Great video. Could you share a similar vid with actual dollar cost of year 1 (as opposed to only percentages) please?

[@theShepherdess]

I plan to! Stay tuned. 👍🏻

[@kestrelkade]

Thank you. As a Canadian, in the tyrannical times, I’m considering moving to TX and enter the sheep business. Your info vids have been very helpful. Finding/locking in land from afar is one of my greatest current challenges. Perhaps you could touch on some other thoughts that may help with that as well.

[@Jordan22220]

@@kestrelkade come to Texas but remember to vote in a way that keeps our way of life

[@hirashamsi7323]

So Good to see your first year success and your hard work going into right direction.I love that you show all the data and laid out so well so easy to understand.Good Work ,we wish you more success 🤍.

[@MrNardo1238]

This. Is. HILARIOUS! I love it.

[@allracesinone3374]

Keep up the great work. I really appreciate your breakdown.

[@elizebethparker5412]

This is so cool! Thank you!

[@musiclovertennessee2189]

What de-parasites/wormer do you use? What method of treatment do find most effective, ie. injection, bath, or oral???? Great work. Absolutely love your videos. You are amazing!!!!!!!

[@theShepherdess]

Oral drenching with prohibit or Cydectin! I talk about it in my free ebook here: harmonyfarms.blog/free-worksheets/

[@lanaromanoff4420]

I love this video!! 😂 Good info! Thank you!

[@2117yaris]

How many acres are you using for 80 sheep.

[@ih508]

Very helpful info Sister. Thank you very much.

[@kalimuddin6617]

where is the your farm . i want visit in your farm ,nice work.

[@jlpaints]

Awesome. Several years ago someone asked Laura's grandfather, who has been ranching his entire life, what would he do if he won the lottery? He gazed into the distance and said, I guess I would ranch until I ran out of money! Now if I could just win the lottery 🤑

[@theShepherdess]

Off to buy my tickets now... I will pick one up for you!

[@jlpaints]

@@theShepherdess Please do. I haven't bought one in at least 3 or so years. I don't like the odds 😂😂

[@TheRfmodulator]

I have a question, if livestock is an appreciating asset, then why is knowledge/education/books not one?

[@theShepherdess]

My books lost value as they were used. I’ll probably never be able to recover cost on those. 👍🏻 -the Shepherdess

[@TheRfmodulator]

@@theShepherdess Thanks for the answer... I have another question about the livestock part ...this one threw me. (I don't know much about accounting...) just thinking it though... On one hand, I can't wrap my head around an individual animal, even a breeding ewe or ram, being an appreciating asset because they have a finite production lifespan. Like a computer that will become obsolete. But, I can see where your flock as a whole is an appreciating asset, due to your good management practices, selective breeding, etc. In five years, the flock will be of higher quality and will have appreciated over what you paid. Am I on the right track with this analysis?

[@steeny1992]

How many acres are you running your sheep on?

[@theShepherdess]

23 acres of pasture right now. 👍🏻 -the Shepherdess

[@mrjeff9169]

Smart young lady!!!!

[@ruthleake1725]

Lol😆 love the first part!😄 Truth…

[@patricknicholas3856]

Thanks for this video.. What numbers or grand total number are we looking at?

[@theShepherdess]

Hi Patrick! I plan to cover real-time costs and gross revenues soon.

[@beefsupreme504]

This might be a stupid question, but is inbreeding a concern? If you start out with one ram and a handful of ewes, and you cull the male lambs and keep the females to become breeding ewes to be impregnated by that same ram, won't the offspring born just become increasingly related to that one ram? If a ram impregnates a ewe that he sired that means that 3/4's of the dna comes from him. If he then impregnates the ewe born of that ewe than 7/8's of the dna comes from him. If impregnates the next generation then 15/16's of the dna comes from him. Is this a problem?

[@theShepherdess]

Line breeding father to daughter works pretty well in the sheep world. However, if you are going to do it you have to start an EXCELLENT ram. This process will bring out the good traits and the BAD traits. I personally would not line breed beyond 2-3 generations.

[@beefsupreme504]

@@theShepherdess Do farmers ever trade rams?

[@Belayet56]

I want to do sheep farming. please give me idea.

[@mashfequrrahmanjaglul9126]

Excellent well done

[@doughiggins2969]

Inspiring!

[@mihalysuba9432]

Well done!

[@checkthisout7661]

Thank u hun👌

[@mischievousmuffin5568]

Another great video :)

[@benhillman11]

Love the intro! Had me laughing. 😂

[@theShepherdess]

@@benhillman11 thanks!! 🤣🤣

[@jared7809]

Harder to sell grass fed beef, doesn’t quite taste like grain fed beef haha

[@bigcatmc]

20,000 views and only 800 likes.....come on people!!

[@thomashesse4446]

Opens the video straight flexing 😂

[@johnpierce5007]

how much cash do the videos make

[@richardb4787]

How do goats compare to sheep? By my experience, sheep aren't as prone to diseases as goats.

[@theShepherdess]

Hi Richard. Here is a great videa from a fellow shepherd on that exact topic: kzbin.info/www/bejne/fmjLp6aje7GcqZo

[@amandaprewer2755]

😂 So funny and so real!

[@andreytrigubko4361]

I’d say 130 sheep is a minimum to make it sustainable/profitable and still managed by just one person

[@theShepherdess]

Maybe that’s the advantage of Dorper: the carcass is about 30% larger than most other breeds. Either way, time will tell if my 80 ewe number is accurate. Thanks for tuning in in the meantime! -the Shepherdess

[@michigandersea3485]

At the very least. I was thinking more like 300 ewes. At a lambing average of 1.5 lambs per ewe after death loss and ewe replacement, that's 450 lambs per year. if you get $200 per head for the lambs when you sell them on the commodity market, that's a gross income of $90,000. You might be able to survive on what is left over after paying your expenses. But first you have to get 300 easy-lambing ewes, and you probably want to own a few acres for a home farm to keep them on when you're feeding hay--assuming you have to feed hay, ever, which you never want to do if you can avoid it. Of course you want to direct market the lamb as much as possible, but you need to be able to make it even if you have to sell all your lambs at the sale barn.

[@true5188]

Depend on what sheep breed you compare it to. It will maybe 30% . Mutton merino will top the Dorper easely and you still have the wool to sell as well. Here in South Africa you need at least 500 sheep to make a living not just a profit and took about 7 years to achieve it . I do have 140 ewes but if you can farm 50% twins out of them you wil survive and it all depends on market price . But I still have 30 cows for income as well. Stocktheft is huge problem here and in one night you could loose everything . Neighbour lost 80 goats in one night 4 weeks ago and none of them been found

[@chadnystrom698]

you are not using accounting terms....this is whats called fixed books

[@theShepherdess]

This video is not intended to to replace legal or professional counsel. My business accountant handles my formal bookkeeping. Thanks for commenting! -the Shepherdess

[@rhuffstedtler]

I get what you are doing here for the most part, but it does feel a little weird. I can’t imagine that you would ever sell the farm as a going concern, but if you did, it seems like there are a few things you’d want to change in the direction of generally accepted accounting principles. The thing that it seems like you might want to consider changing anyway is the notion of taking your appreciating assets out of your calculation. The GAAP way of doing that would be to hold them on the books at book value, and either write them off when they die, or treat them as cost of good sold when you sell them. That said, you’re making me realize that I have no clue how GAAP would apply to certain situations. I *think* GAAP would depreciate a breeding ewe because eventually she’s going to stop breeding. I have no idea how GAAP handles it if you keep a lamb and raise it to become a breeding ewe. All that said, one of the major purposes of accounting is to help you make business decisions, and it seems like even the things in your analysis that seem a little unorthodox probably get you to more or less the same decision that you would make doing things formally.

[@mrjeff9169]

You should be able to get a Tax break on the Cap Ex infrastructure and depreciation 😉

[@breesechick]

❤❤❤

[@beamlakbelayneh8757]

The phone is annoying

[@jrgee173]

LIKE 1.4K

[@donroo736]

I can do it for half hahha

[@MrNardo1238]

You could save a lot of money if you just got rid of that phone :)

[@theShepherdess]

You are right. 😂😂

[@twofstu1]

The showing cash and receiving phone calls is very annoying, there's no need for that.

[@jordanisekimoglou1283]

😂

[@whitneydceleste]

You seem like a very lovely, happy girl. But I noticed you keep giving thanks to God for everything on your farm ... Do you think the loving God we all worship, rewards people who willing send his animals to have their throats slit, and hung upside to bleed out , so we can eat their flesh, and wear there skin? ...just so sad for these beautiful living beings he has created