8 November 1996

BSE – GOOD OUT OF BAD…

Little good has come of the BSE crisis, except, perhaps for sheep producers.

Demand for lamb has risen by 4-5% according to MLC figures, while shop floor prices have risen by about 9%.

Coupled with this, more lambs are being retained on-farm, and some traditional beef finishers are trying their hand at what they see as a more predictable market.

Thats led to high prices for stores and breeding stock – up £10 a head and £15 a head respectively – and has left many flockmasters with a feel-good factor.

But there is a flip-side. Higher store and breeding stock prices mean buyers must improve efficiency to maintain returns. And high prices throughout Europe could see the sheep annual premium fall by about £17 a head.

Recent figures suggest the national flock has fallen by 1.2% in Scotland and 4% in England. That should mean tight supply and the likelihood of firm prices. But will consumers be willing to continue to pay high prices?

The uncertainty means that efficient management – and investment to lower production costs in the long term – should be key issues. Better grass use, economical feeding, efficient shepherding and financial awareness will all help.

Current profitability means that now is the time to reassess your enterprise. Cash spent now could be pounds saved in an uncertain future.