Key points:

• Buying lighter and selling heavier lambs with less reliance on expensive concentrates appear to be the key reasons for better net margins among the 34 store lamb finishing enterprises covered by the sample.
• Even with the inclusion of non-cash costs the top third made a positive margin of over £5 a lamb compared to a loss of over £10 for the bottom group.

• Compared to 2004/05, on average the feeding period is eight days longer and the concentrate usage over 7kg less. This suggests more was made of finishing lambs off grass and keeping costs down probably due to market conditions at the time.
• Fixed costs were slightly greater for top third producers with all items higher, apart from paid labour, than the bottom group.
• However, when the value of unpaid family labour is considered together with paid labour, the bottom third of producers indicate they have a more labour intensive enterprise.
• The bottom third producer margin (excluding non-cash costs) per store lamb finished in 2005/06 was a loss of £3.68 while in the top third group the net margin was £8.37 a lamb.
• Even though eventual sale price is clearly crucial in terms of helping to determine the net margin, success in this area can come very much down to timing, although the amount of labour involvement is also a key factor.

• Lamb output by the top third was higher than for the bottom third. They purchased lighter lambs and finished at 3kg heavier on average than the bottom third. Also lower variable and store purchase costs meant a greater gross margin.

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