By FWi staff

SHEEP producer Richard Howells is worried. Like many farmers, he fears that sheep-quota prices have soared so much they will soon become unaffordable.

Farmers across England and Wales this year must part with record amounts to buy the quota which allows them to keep sheep.

Quota in the Less-Favoured Areas (LFA) of Wales costs £28 per sheep to buy outright, or £15/head to lease on an annual basis.

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  The record values have left producers unsure whether they will get enough money back from the sheep premium subsidies paid to hill farmers by the Government.

“Its a gamble,” says Mr Howells, who farms near Port Talbot. “We could end up with nothing left.”

Those who purchased or leased earlier in the season will still make a profit, but for those buying now the gap narrows, said Mr Howells. Across the border in England, LFA prices have climbed £29/head above last years values to £38/head.

The quota trade has firmed due to expectations of higher premiums, which rise whenever lamb values fall.

At the auction at Rugby market yesterday (Monday), values were up again on last month and large quantities were traded.

Each buyer bought enough quota for an average of 200 sheep, compared with only 50 last month, and prices responded to the demand, according to auctioneers Howkins and Harrison.

Jenny Lindley of agents Charles Holt Consultancy said: “People want quota and so will pay for it.”

But farmers calculating how much premium they will receive should pencil in at least £18/head, said Paul Williamson, of Barber and Son, Whitchurch, Shropshire.

“Its a guaranteed income,” he added.

“The main reason that prices are so high this year is that farmers have done their calculations and sheep are more beneficial than suckler cows.”