Good genetics maintained through homebred replacements are the key to the production of premium-earning quality lamb on beef on a north Powys farm.

When fellow members of a discussion group visited Llysun, Lanerfyl, Richard Tudor told them he and his father, Tom, endeavoured to produce for the top end of the market as efficiently as possible.

The 291.6ha (700-acre) farm runs from 160m to 375m (550ft to 1250ft) and includes 167ha (400-acre) of hill, much of which has been improved over the last decade.

"We have reduced stocking in recent years to just over 1100 ewes, 250 replacements and 110 spring calving sucklers producing store and finished cattle," Mr Tudor explained.

Cutting the flock by 150 ewes has boosted lambing percentage, so the same number of Texel and Beltex cross lambs were finished.

Most ewes are purchased white-faced Welsh Mules, but replacement policy has changed. Now the best Texel x Mule ewe lambs are retained and these do well on higher parts of the farm.

Beltex tups are used on ewe lambs and Texels on the rest of the flock, with all lambs finished off grass, mainly for Waitrose. Scanning this year indicated that 250 old ewes, would achieve 194%.

The 482 mid-age ewes scanned 202% and 380 yearling 172%. This should mean an overall lambing percentage of 190% and a potential crop of 2114 lambs. The 250 ewe lambs were predicted to produce a lambing percentage of 95%.

But Mr Tudor explained that success was not just measured by numbers. "Before 2001 about half the lambs were sold at live auctions, but now they all go to Waitrose, who we started supplying in 1993. This means to get the best return/kg we have to use the right genetics to hit the buyer's specification.

In 2007 a total of 1569 of 1854 lambs offered to the Waitrose scheme matched specification. They weighed an average of 19.7kg on the hook and realised an average of 256.63p/kg.

But the annual figures show clearly that lambs grading E and U for conformation and falling into fat classes 2 and 3L generated significantly higher returns.

"I believe grading has got harder," Mr Tudor told his visitors. "A few years ago we had 45% Es and Us, but now the average is 28%."

He was also questioned whether the reward for producing the 18-19kg carcasses the buyer preferred fully compensated for the lower saleable weight of lamb. Though the market price/kg of a 21kg lamb is lower the total return can be better. But he accepts producers who want top prices have little choice, but to meet specifications.

Visitors heard serious soil contamination had made 2007 silage unpalatable. This had meant spending £52/t on 29t of Trafford Gold to mix with it. Reduced silage intakes had also limited space to house ewes in one silo.

Poor grass silage quality has also hit cattle condition, though this has been countered by feeding some whole-crop barley to supplement the blend of silage and Trafford Gold.

Mr Tudor said suckler cows were mostly milky Simmental crosses, which were served by Charolais or Simmental bulls, with the Simmental bought on milk and easy calving figures, to produce replacement heifers.

Last year 14 store bullocks were sold for an average of £645/head. A dozen young bulls also realised £700 head.

The rest of the calves were finished and sold to Celtic Pride, the 28 bullocks averaging £761 and 50 heifers £702/head.

Overall the 102 head had sold for an average of £710/head. When the mid-April born 2007 calf crop were weighed on 18 January male calves averaged 400kg and heifers 365kg. But Mr Tudor said returns from beef production remained unsatisfactory when all factors were considered.

• The Welsh Assembly has been urged to channel EU funding to support livestock discussion groups. "There is plenty of evidence from New Zealand and the Farming Connect initiative in Wales that it pays dividends to get farmers to share their knowledge," said Powys beef and sheep producer John Yeomans. He and his wife Sarah, who runs a Lantra training group, co-ordinate an informal community group of 40 members. The group first met in 1999 when the Yeomans' farm became a technology transfer conduit as part of the Welsh Sheep Strategy. "We believe groups like ours are a cost effective way of disseminating new technology and letting farmers share ideas," Mr Yeomans said.