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Profitable Swedish lamb production by economies of scale

Kumm, Karl-Ivar (2009). Profitable Swedish lamb production by economies of scale. Small ruminant research. 81 :1 , 63-69
[Research article]

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Official URL: http://dx.doi.org/10.1016/j.smallrumres.2008.11.00...


Economic sustainability assumes profitability (revenues ≥ costs including annual cash expenses as well as family labor and investments). Calculations suggest that sheep flocks of more than 500 ewes can be profitable under Swedish conditions whereas smaller flocks are unprofitable unless they are managed by cheap existing resources including buildings, fences, machinery and family labor with low or no opportunity costs. Despite this economies of scale less than 1 % of the Swedish sheep flocks have 500 or more ewes. Possible reasons are, according to interviews with lamb producers which have built up for Swedish conditions large sheep flocks of 90-900 ewes (average 380), growth sacrifices when developing large flocks and lack of accessible cheap land for providing large flocks with pasture and winter forage. The growth sacrifices reducing revenues or increasing costs during or immediately after the growth period include low production of primiparous ewes, reclamation of additional land and capital costs of new buildings before the flock has been expanded to the intended number. The chas-flow is another problem for expanding sheep operations. Profitable lamb production presupposes large areas of land with zero or low opportunity costs. In fertile flatlands the opportunity costs are too high and in forest dominated regions it is difficult to get hold of large enough areas near the farm centre for pasture and winter feed production. The latter problem can be solved by leasing cheap land further away and transporting feed and grazing animals, and by extending present pastures by incorporating adjacent overgrown pastures, marginal arable land and forest land. Another requirement for long-term profitable lamb production is to reduce the costs of new sheep sheds below what is a common cost level in Sweden.

Authors/Creators:Kumm, Karl-Ivar
Title:Profitable Swedish lamb production by economies of scale
Series Name/Journal:Small ruminant research
Year of publishing :2009
Page range:63-69
Additional Information:The original publication is available at Elsevier, doi:10.1016/j.smallrumres.2008.11.006.
Publication Type:Research article
Full Text Status:Public
Subjects:Obsolete subject words > SOCIAL SCIENCES > Business and economics
Obsolete subject words > FORESTRY, AGRICULTURAL SCIENCES and LANDSCAPE PLANNING > Animal production
Keywords:sheep, lamb production, economies of scale, profitability, growth sacrifices
Permanent URL:
ID Code:3641
Department:(VH) > Dept. of Animal Environment and Health
Deposited By: Gunilla Jacobsson
Deposited On:24 Mar 2009 00:00
Metadata Last Modified:02 Dec 2014 10:23

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