SRM rules hit cull ewes while abattoir jobs lost
By Robert Davies
NEW specified risk material rules have driven sheep prices down and led to job losses in abattoirs.
French buyers, reluctant to take split carcasses, are buying from Spain and Ireland instead of Britain, where spinal cords must now be removed from animals over a year old.
Anglesey-based Cwmni Cig Mor has stopped killing cull ewes – which normally account for about 25% of throughput – and laid off 25 of the 150 workers.
"This time last year we were paying £2/kg dw for ewes," says managing director Owen Owen. "Now we have to turn away ewes offered by customers who have supplied us for years. It is not the cost of removing cords – which is being subsidised until the end of March – it is the attitude of our customers.
"The domestic market for mutton is limited and if exports are prevented farmers will find it difficult to sell their cull ewes."
He calculates that the lairage to truck cost of killing a sheep has increased by 25% over the last year. When the full costs of new regulations bite in April it will rise by at least another 12.5%.
The downturn in auction market values was already evident on Monday, where average light cull ewe prices fell another £4 to £20.96 a head.
And the fear is that the problem will become more widespread later in the season, when hoggets also reach the year-old stage.
The problems faced by abattoirs, and complaints that ewes taken to some auctions are failing to attract bids, were raised when the Farmers Union of Wales met Welsh Office officials on Monday.
"We managed to get a firm promise that a legal opinion would be sought on whether the constraints could be eased to allow UK exports to compete on equal terms," Mary James, FUW policy director, said later.
The Federation of Fresh Meat Wholesalers has called a special meeting next week to examine the implications of the new SRM regulations, and increased offal disposal charges.
"Profit margins are already very small and some abattoirs that export sheep over one year old are being hurt," said spokesman Peter Scott.
"The industry faces a £160m/year increase in costs. I fear that some plants will close, and we will end up exporting jobs along with increased shipments of live sheep."
MLC senior economic analyst Duncan Sinclair said: "It is clear that individual exporting plants are suffering, and this is affecting the price of cull ewes in some areas." *
Where now for cull ewe and hogget prices, ask farmers and exporters?