Investigating How Genetic Merit and Country of Origin Impact the Profitability of Grass-Based Sheep Production Systems

SIMPLE SUMMARY: An animal’s genetic merit can govern its production potential and performance. This study used a bio-economic model informed by a large dataset of records from a commercial sheep-production-flock study to investigate the effects of selecting breeding females based on their maternal genetic merit for productivity, feed demand and gross margin. The results showed that selecting and using breeding females of high genetic merit will increase the gross margin of the flock, thus improving the profitability of the production system for the farmer. Our results provide insight for sheep-meat-production industries into the cumulative economic returns of using animals of high genetic merit. Our results also indicate potential outcomes from improving flock genetic merit, an important key performance indicator for the industry, and inform decision-making around production priorities of producers. ABSTRACT: The objective of this study was to simulate and assess the profitability of sheep production systems that varied in maternal genetic merit (high or low) and country of origin (New Zealand (NZ) or Ireland), using the Teagasc Lamb Production Model (TLPM). A production system study performed at Teagasc Athenry, Co. Galway, Ireland, from 2016 to 2019, inclusive, provided key animal performance input parameters, which were compared across three scenarios: high maternal genetic merit NZ (NZ), high maternal genetic merit Irish (High Irish) and low maternal genetic merit Irish (Low Irish). Prior to the beginning of the study ewes and rams were imported from New Zealand to Ireland in order to compare animals within the same management system. Ewes were selected based on the respective national maternal genetic indexes; i.e., either the New Zealand Maternal Worth (NZ group) or the €uro-star Replacement index (Irish groups). The TLPM was designed to simulate the impact of changes in physical and technical outputs (such as number of lambs, drafting rates and replacement rates) on a range of economic parameters including variable costs, fixed costs, gross margin and net profit. Results showed that total farm costs (variable and fixed) were similar across the three scenarios, driven by the similar number of ewes in each scenario. The number of lambs produced and the cost of production per lamb was 14.05 lambs per hectare for the NZ scenario at a cost of EUR 82.35 per lamb, 11.40 lambs per hectare for the High Irish scenario at a cost of EUR 101.42 per lamb and 11.00 lambs per hectare for the Low Irish scenario at a cost of EUR 105.72 per lamb. The net profit of the three scenarios was EUR 514, EUR 299, and EUR 258 per hectare, for the NZ, High Irish and Low Irish scenarios, respectively. Overall, the NZ scenario had a lower cost of production in comparison to either Irish group, while the High Irish scenario had a 14% greater net profit than the Low Irish scenario, equating to an additional EUR 41 per hectare net profit. Output from this simulation model reiterates the importance, for overall farm profitability, of maximising the number of lambs weaned per hectare, particularly through maximising income and diluting the total farm costs. To conclude, the use of high-maternal-genetic-merit animals, regardless of their country of origin impacts farm profitability.