17 July 1998

Sponsor supports important area

The UK sheep industry continues to be an important element of the agricultural economy. Indeed, for the 83,000 UK producers with breeding flocks, the fortunes of the sector have a direct impact on their livelihood and as a consequence, the rural economy.

In common with other agricultural sectors, the profitability of the sheep sector has become more closely linked to the fortunes of the UK economy as a whole, and specifically, the strength of Sterling. On the European front, great changes are ahead, with the impending single currency likely to change the way we market our products forever.

As we become closer to our European partners, we will have access to ever more consumers and markets. Here lies the challenge for UK sheep producers, to establish ourselves not only as the first choice supplier of quality lamb to all European countries, but to reposition lamb as a higher priced quality product on the export markets.

As consumer awareness grows, lamb has many unique selling points on which I believe we can build our marketing strategies. Lamb is perceived as a natural, environmentally-sound product. With consumers increasingly concerned about such issues, I believe that there are many opportunities to market lamb as a welfare friendly, healthy product, positioning lamb in the premium market.

However, it is essential that farmers are able to compete at a profit within the constraints of sheep quota. Last year was a difficult one for producers, combining tough trading conditions and lower premiums. Whilst far from ideal, this seasons lamb prices are better than originally anticipated and it is hoped that the market will hold up well into the autumn. With sheep annual premium forecast some £5/head higher than last year, margins should edge up. Nevertheless farmers, like all businessmen, will have to constantly review the competitive environment in which they trade, assess opportunities to adapt systems and sale of product, whilst remaining totally focused on their individual cost structure.

At NatWest we are proud of our 200-year tradition with the UK sheep industry. We are well represented by branches in the main sheep production areas of the UK and you will find that our doors are open for business. Our local agricultural business managers will be pleased to speak to you about the range of services NatWest can offer to farming customers.

NatWest has been pleased to sponsor this event for many years and I am delighted to announce that we have already confirmed our support for Sheep 2000.

Brian Montgomery

NatWest Bank