For simplicity sake, I'll be listing and estimating my expenses for my 1+ acre enclosed ranch (It's a hobby) with seven adult sheep, a goat, and the new addition this year of five lambs. You should be keeping track of ALL of your expenses and collecting those receipts in date order; make sure you note what they were for on the back of it so that you can sort it all out later. Beware; don't think that handing a shoe box over to an accountant or CPA is going to be cheap. I "guarantee" that these will charge you by the hour and throw in a few for good measure to teach you a lesson for being lazy and making them do YOUR work.
 
Below I'll also pretend that this was my first year and plug-in my start up expenses as though I just built my flock up. Include is what I might pay in taxes and mortgage assuming I owned the land and it was a working ranch (Ag-exempt). If you're just starting out, this might help you get an idea of what you'll be spending each year but you'll need to look up local costs for feed and consumables because different parts of the country vary for some things.

Land
    Purchase ($4k per acre, 20% down) -------
    Mortgage
         (15 year, fixed, 20% down, 5.75%) -----
 
Property Taxes ------------------------------------------
 
Capital Expenses
      Sheep (1)    ------------------------------------------
      Barns --------------------------------------------------
      Shelters ----------------------------------------------
      Feeding areas -------------------------------------
      Fencing & Gates (2)------------------------------

General Repairs ----------------------------------------
Tools -------------------------------------------------------
Other Supplies -----------------------------------------
Feed --------------------------------------------------------
Gas (3) -----------------------------------------------------
Minerals (Free range) --------------------------------
Mineral Blocks -----------------------------------------
Salt Blocks ---------------------------------------------
Carbonate ------------------------------------------------
De-worm --------------------------------------------------
Electricity (4) ---------------------------------------------
Water (5) --------------------------------------------------
Veterinarian (6) ------------------------------------------
 

Total First Year Expense

Est. Normal Operating Expense



The break even price for every lamb would be (approx.) ---------------


Assumptions:

A) Maintaining a herd size of 12 breeding sheep.
B) Selling every new lamb at 2 months old to maintain a constant herd size & food budget.
C) 20 lambs are sold per year on average
(a vigorous group).





(1) Six sheep, four adults and two lambs later breeding and having five more lambs and being fed

(2) My land is tied to a building that takes up more than 300 feet of fence line as well as another 100 feet of existing chain link and includes several bay doors that I use as gates. I was fortunate because this lowered my start up costs significantly.

(3) Running and back and forth to the feed store costs money and at the current price of gas this can add up. I wouldn't suggest getting any more than a months feed at a time because bugs will eat your feed.

(4) There are several 100 watt lights on my pasture that are on every night for 12 hours on a timer. I calculated this at $0.16 per kWh which is the current rate locally.

(5) I use rainwater that funnels into a large pond I dug. You may need to go to your water bill and estimate what you use for this expense.
 
(6) I've been very fortunate to have never needed a vet. This bill can eat you alive if you don't take proper care of your animals which is why I provide added food, minerals, and watch my herd for disease and health concerns.

Per Year
$  800.00

$  312.00

$    24.00


$   600.00
$   669.00
$     82.82
$   115.43
$1,116.02

$    58.33
$  212.38
$    33.73
$  471.56
$    34.43
$    27.48
$    53.98
$    10.95
$      6.31
$    42.49
$   140.16
$      0.00
$      0.00


$4,811.07

$1,215.42    ($101.29/ mo)



$  60.77



Now some may argue about land prices or tax exemptions/benefits, or, I have a poor pricing for feed or some other such thing; all good things to discuss, fine, I'll give you those points. And as you can see from the For Sale page on this site, I'm getting close to this price myself. However, as with beef, oranges, or any other commodity, we're eventually going to need to establish a market price and a market that will bare this price or better else it will always be a hobby and labor of love.