How to Make Money With Sheep

Research the market and supply chain. According to Sheep 101, not enough lamb, wool, or sheep cheese is produced in the U.S. to meet the domestic demand. Also, meat production is now surpassing wool production in the U.S. sheep industry. Find out what your merchandisers, potential consumers, breeders, packers and retailers are looking for in your products. Don't operate in a vacuum but tailor your animal products to the demands of the marketplace. In this situation, complying with customers' needs will lead to success. Go after the market that is the best fit with your production methods. Because sheep farming accounts for only 1 percent of livestock, tailor production to this niche market.

Calculate start-up and operating costs. Essential items total approximately $16,900. These include corrals and pens, equipment and supplies, watering system, pasture, fencing and animals: 50 ewes and two rams. This figure does not include the cost of buying land (1 acre per five ewes), a house or a sheep barn. Operating costs include feeding, shearing, fertilizer, straw bedding, manure disposing, veterinary treatments and maintaining buildings. For a wool farm, estimated operating costs exceed $8,000 per year and profits amount to only $1,600.

Select the best traits for your herd. Carefully select the stud rams and breeding ewes for a fair price and genetic makeup that favors the qualities you are seeking: milk-producing ability, meat yield, resistance to disease and parasites, efficient growth, longevity, likelihood of producing twins or ability to breed during many seasons.

Determine the size of your herd. The majority of sheep farms are large-scale, so to be profitable, small flocks must be productive and be able to find their way to advantageous markets. At least 500 ewes are necessary to make a profit.

Find outlets for your sheep products. Most income related to sheep farming comes from selling lambs aged 2 to 14 months. In addition, dairy sheep farmers can sell their products to make money from lambs, wool, cheese or milk. Some sheep can be leased out for grazing on others' land to control grass growth. On the cutting edge of science, bio-pharmaceutical products and human genes have been inserted into sheep so that they produce medicines and human milk proteins. Direct marketing may be more profitable for sheep products as well as raising sheep that give specialty fleece for the arts and crafts market.