21 June 2002

Dairy disillusion brings switch to beef up profits

By Wendy Owen

North east correspondent

DISILLUSIONED with falling milk prices, a Durham livestock producer is scaling down dairy, sheep and arable enterprises to build up direct sales from the beef herd and gain more control over prices received.

Milk quota has always been a problem for Brian Hodgson at Aldin Grange, Bearpark, because he favoured spending any spare capital on land. He now has 93ha (230 acres) and rents a further 28ha (70 acres).

"But in 1999, I decided I was too vulnerable to fluctuations in the price of leased milk quota. I had 70 Friesian-type cows and had invested in a new building. But government is not interested in supporting the dairy industry and milk production is becoming less and less profitable."

Until the change of focus, a Limousin bull was used on some dairy cows and most progeny sold as stores. A few were finished at home and carcasses distributed among family and friends.

This meant that increasing direct sales was an obvious option and a further incentive was offered when a local butcher announced his retirement. He was selling some second-hand equipment at a reasonable price and Mr Hodgson decided to invest £3000 to convert one of his buildings into an on-farm meat shop. The shop opened in October 2000, without any grant aid.

"I looked into grants, but I had to act quickly and it seemed that the application process would slow me down. By doing all the work myself, I managed to keep costs to a minimum.

"I considered putting in a cold store and employing a butcher, but that would have been expensive. In the end, I decided to keep everything simple. Cattle are butchered at an abattoir, so I only have to package meat and sell it."

Mr Hodgsons main challenge is judging how much meat he will need. "It varies from week to week. But I make sure my prices are competitive. My meat is generally cheaper than the local supermarket."

A key element to the new business is Mr Hodgsons relationship with a small, local abattoir. He tried dealing with larger companies, but was pushed to the back of the queue at busy times.

So far, shop beef sales amount to half a carcass a week, with all bullocks sold through it. The shop opens on Fridays and Saturdays, but there is no time to attend farmers markets or seek more customers.

"I like to stay close to home in case anything goes wrong. The shop is gradually building up sales through word of mouth and the aim is to sell one animal a week. I have tried distributing some leaflets, but I do not think it helped."

A few catering outlets in the area also take between half and one carcass a week. But Mr Hodgson learned the hard way about relying heavily on one customer. Last spring, a local restaurateur setting up a new business appealed for a regular supply of Aberdeen Angus beef. Mr Hodgson bought a Canadian-type Angus bull and began multi-suckling his dairy cows with Aberdeen-Angus cross calves.

Six months after the restaurant opened, it ran into difficulties and has since closed. But having already made the changes, Mr Hodgson plans to stick with the new regime, as he is committed to selling British food locally.

To provide a wider range of products in the shop, a small number of sows are kept to produce home-reared pork and a flock of 100 hens provides free-range eggs. The only products sourced off-farm are chicken, bacon and gammon. But with all the extra work created, the small sheep flock proved too labour-intensive and lamb will eventually be sourced from another local producer.

Mr Hodgson now feels better about his business since making the radical changes. "It is a personal thing. Times are hard and we cant rely on other people to help us, we have to help ourselves. I have milked all my life and I was fed up with long hours and no holidays.

"I made this move so I could gain at least some control over prices and take a bigger slice of the profit on what I sell." &#42

&#8226 Control over prices.

&#8226 Scaling down dairy.

&#8226 Switching to Aberdeen-Angus.

Brian and Shiela Hodgson are replacing dairy cows with beef animals that they can finish and sell in their farm shop.