A Comparative Case Study by Theuns Fourie, Warden

A switch to Dohnes in the Fourie Farming Enterprise has resulted in an improvement of 232% profit per sheep and 236% profit per hectare in less than a decade.

Theuns Fourie is an agricultural economist who, together with his brother Daan, also runs the farm Grootkop in the Warden district of the Eastern Free State. This is summer rainfall region with a fairly high precipitation, giving rise to mixed farming involving sheep and cattle with a small amount of summer grain production. The native pasture (highland sour grassland) forms the basis for livestock production with cultivated pasture as supplementary grazing. A pure commercial Merino flock has been run from 1970 to the mid 1990s.

Theuns is attached to the Excelsus Administration Bureau which does financial recording and business analyses for farmers in the region. In this capacity he was able to compare their financial results with those of other farmers who kept similar records and to judge the relative profitability of their enterprise. Comparing lambing percentages, kilograms of wool shorn and microns with friends around the barbeque fire was one thing, but the important issue was how all these production factors translated into Rands and Cents.

In the 1990s changes in the market environment were taking place more rapidly than the pace at which the sheep production system could adapt. During 1995/96 it was realised that the sheep farming enterprise was in trouble. Bureau service records revealed that on the basis of profit per Small Stock Unit (SSU), the Merino flock was less profitable than the average of the sheep flocks in the region. Furthermore, as a financial consultant to Freddie Schmidt, a prominent Dohne breeder in the neighbouring district of Memel, he realised that this particular commercial Dohne flock was more profitable than even the top third of sheep farmers in the Bureau Service group. At the same time two of the Merino Studs from whom they had obtained rams were sold as they were no longer financially viable.

These facts led to a decision to switch to Dohnes. This was not an easy decision for, as Theuns describes in his own words:

A good Merino flock with high quality wool is not developed in one generation. It is a long term process with a strong tradition involving fairly rigidly prescribed breeding standards. A strong discipline is required to maintain these standards during good and bad years. Peer pressure means that even the thought of running any breed other than the Merino amounts to betrayal of the Merino tradition and breed policy. It is thus a huge emotional struggle before you even consider running any other sheep than a pure Merino."

Consequences of the shift to Dohnes

A summary of the comparative productivity of the original Merino flock from which the Dohne flock was developed, and the current flock is set out in Table 1. The average of two three-year time spans in the respective eras, are used as a basis for comparison.

The biggest and probably the most important change that took place was the composition of the flock. In the Merino flock ewes comprised only 51% of the total flock whereas ewes comprise 80% of the Dohne flock. The problem with the Merino flock was that the lambs were not marketable at an early age. They had to be retained and run as young sheep (12 - 18 months old). This effectively reduced the relative number of ewes that could be run. Ewes rearing the next lamb crop had of necessity to be given the best available feed, relegating the young sheep to the poorer quality grazing to which they were ill adapted, resulting in poor weight gains and losses. Maiden ewes could only mated successfully at 18 months of age and wethers were only marketable at 18 - 24 months. As a result of these difficult conditions the young sheep, which formed a large percentage of the flock, were scarcely able to produce 4 kg of wool.

In contrast the F1 Dohnes wethers were marketable at 6 - 8 months of age and that the maiden ewes could be mated at 12 months of age, which made the management of the flock a lot easier. The consequence of early marketing of lambs meant that up that more ewes could be run and better quality grazing was available to the 12 - 18 months-old pregnant maiden ewes, obviating weight loss while teething.

Running the same total number of sheep as before, it is now possible with Dohnes to produce 50% more lambs (as a result of the higher percentage of ewes in the flock), whilst the wool production per has increased. This is due to the fact that more adult sheep are now being shorn and Dohne maiden ewes produce more wool compared to the young Merino sheep in the previous era.

Average wool production per head

  • 1995 to 1997: 5.14kg wool per sheep shorn
  • 2.6kg wool per lamb shorn
  • 2003 to 2005: 5.2kg wool per sheep shorn
  • 2.4kg wool per lamb shorn

When selecting rams the current focus is on high body weight and good wool quality.

Comparative financial results between the 1995 Merino flock and the 2005 Dohne flock

The income ratio of meat to wool has changed from 45% : 55% in the Merino flock to 69% : 31% in the present Dohne flock. There has been increase of 232% in income from R110.31 to R256.61 per SSU. Even if half of this figure is attributed to price increases of wool and meat, the change from Merinos to Dohnes has been a sound financial decision.

The change also caused the Fouries to focus on more efficient land utilisation and to concentrate on greater profit per hectare. It is important to express profits in R/ha and not in R/SSU, Since land is the limiting factor net income per hectare, rather than per sheep, is a more realistic criterion The profit margin per hectare has increased from R136 to R335 - an increase of 246% over this period (see average columns in Table 1).

The overall experience of the Fouries is that Dohnes adapt well. As a result of their hardiness and non-selective grazing habits, coarse native pasture is more effectively utilised by mature sheep freeing up expensive cultivated pasture for lambs. Since Dohne lambs are efficient feed converters expensive pasture is now turned into meat for the market, thus increasing profits.

The versatile Dohne offers the best of both worlds and many options. Lambs can be marketed off their mothers, or at any time to 12 months of age, depending on the prevailing wool/meat price. Dohnes produce high quality Merino wool with an average of 20 microns. The Dohne Merino is a robust, easy-care sheep with low maintenance which fits in very well with the Fourie's mixed farming enterprise.

Table 1. Enterprise Analysis per Small Stock Unit (SSU)

Comparing Merinos (1995 - 1997) and Dohnes (2003 - 2005)

Currency = SA Rands Merinos Dohnes
  1995 1996 1997 Average 2003 2004 2005 Average
Numbers of Sheep stocked 1884 1650 1566   1704 2142 2178  
Wool sales 54.96 52.43 63.04 56.81 150.29 116.18 71.99 112.82
Sheep sales 46.63 51.41 58.46 52.17 85.25 125.05 163.6 124.65
Gross value of production 110.31 74.05 110.91 98.42 207.33 250.38 256.6 238.1
Direct costs 24.76 22.41 22.12 23.1 55.02 53.37 34.95 47.78
Allocated costs 15.43 15.41 14.63 15.16 27.71 34.15 39.92 33.93
Total Expenditure 40.19 37.82 36.75 38.25 82.73 87.52 74.88 81.71
Enterprise Margin 70.11 36.23 74.16 60.17 124.6 162.86 181.7 156.4
Ewes as % of flock 56 42 55 51 77 81.2 80.8 79.67
Lambing % 77 80 75 77.3 90 92 105 95.67
Hectares grazes/SSU 0.45 0.45 0.43 0.44 0.52 0.45 0.43 0.47
Enterprise Margin/Hectare 155.80 80.52 172.47 136.26 239.61 361.92 403.85 335.13