Agenda 2000s good for UK, but planning needed
By FW Livestock reporters
LAST weeks Agenda 2000 agreement provides a far better deal for UK livestock producers than was expected.
But it may mean more planning and paperwork for some, particularly where extensification payments are claimed, says experts.
Details (Business, p25) are agreed in principle, although they may yet change if finance ministers decide they are too expensive, warns MLC beef analyst Duncan Sinclair. "A concern with many of the changes is that they are still dangling a subsidy carrot, they are not encouraging people to produce for the market."
Beef producers will be affected most immediately by the changes, and will benefit from almost 100% compensation for market support cuts rather than the threatened 80%, says Signet consultant Ian Ross.
"Margins for beef producers might even improve as the finished price wont necessarily fall in the same way as market price support."
Both SCP and BSP increase, while BSP payments will be made a month earlier, seven and 20 months rather than the current eight and 21 months. Mr Ross says this means more chance to sell cattle when they are likely to grade best. "This avoids hanging on for an additional month, by which time cattle may be too heavy and over-fat."
The introduction of a slaughter premium may also cut down on the number of steers retained for a second BSP, says Mr Sinclair.
The premium – paid on all cattle – will start in 2000, but only one third of the full k80 (£55) will be paid in the first year, according to NFU livestock specialist Kevin Pearce. Payments will start at £18 for adult cattle and £12 for veal calves.
There is likely to be a retention period for the slaughter premium, but its length is not yet known. And while the intention is that producers should receive the payment, that has not been confirmed either, warns Mr Pearce.
Veal calf payments have also been introduced, but the UK has a regional ceiling of only 24,000 calves because of limited exports. "This will not be a replacement for the calf processing scheme. Calves must be kept for a month and it is not going to be worth keeping them for £12 at most next year.
"At this stage, therefore, be careful. Do not plan production around getting a slaughter premium, wait for the rules," says Mr Pearce.
For milk producers, effects of Agenda 2000 are delayed until 2003, but quota increases next year in Ireland and Northern Ireland may put pressure on prices, says NFU economist David Legg. In 2003, quota compensation will not apply to the 1.5% increase in quota, which could split the quota market, making it more complicated.
All livestock sectors should benefit from arable reforms. If world cereal prices remain at current levels there would be a 20% drop in barley prices and 15% cut in wheat prices under Agenda 2000, says NFU senior economist Derrick Wilkinson.
This would mean lower feed costs. "If these cuts are passed through to feed prices, expect a concentrate containing 25% wheat to drop in price by 4%."
But HGCA economist Gerald Mason warns that there is scope for world market prices to increase above intervention price before full implementation. "This would mean no drop in animal feed prices."
lMaize prospects p50.
Extensification more complex
EXTENSIFICATION premiums will be more complicated than in the past, and will include all cattle over six months old and sheep on-farm, rather than just those which premium is claimed on.
NFU livestock specialist Kevin Pearce says many mixed holdings which depend largely on cattle will no longer qualify for extensification. "Also, half Less Favoured Area farms will struggle to qualify."
It is likely producers will need to apply for extensification separately from other premiums, although details have yet to be confirmed, he says.
Interim stocking rate forms may need completing through the year and good records will also be needed because MAFF is to undertake spot checks. "But for those qualifying for extensification, the extra paperwork will clearly be worth the effort."
Mr Pearce says that it may be worth selling a few cattle to keep within the stocking density restrictions. But it needs careful planning to ensure that it is worthwhile. That view is echoed by Signet consultant Ian Ross. "Planning is going to become far more important as rules become increasingly complex and there are more possible permutations."
Where extensification limits are breached, the MLCs Duncan Sinclair suggests that where the financial return a hectare is greater from cattle than sheep, selling some sheep might help. "Taking on more land might be an option, but it is often difficult to find it close enough to home." *
Whole-crop traceability attractive
HOME-GROWN whole-crop forage is set to become even more attractive to beef producers aiming to achieve greater feed traceability, says one of the systems pioneers.
While most of the emphasis on feeding whole-crop has, until now been focused on the dairy herd, John Bax, technical manager of Biotal, believes fermented whole-crop could help some producers stay in business with acceptable margins, despite current low returns.
Speaking at the Northern Whole-crop conference at Thainstone, Inverurie, Aberdeenshire, he said he expected new technical developments would make whole-crop more popular in Scotland. "The system also has several important potential benefits: It is simple, feed quality is consistent and, since the diet is dry, less bedding is required. Animals are proving to be healthier and, importantly, are lean so they can then be sold straight out of the pen." *
Probably the Worlds largest flock of Soay sheep receiving its daily allocation of bought-in fodder beet at Grange Farm, Bicester, Oxon. Clive Hawes, who owns the 400+ ewe flock, in-lamb to Suffolks to produce commercial lambs, feeds fodder beet and hay for six weeks to avoid twin lamb disease. Soays are cheap to keep, says Mr Hawes, but are harder to handle than other breeds.
Target worming to save cash
SHEEP producers could cut costs by eliminating routine worming of lambs, according to SAC sheep specialist John Vipond.
"We have to break with tradition and look at every avenue that can lead to reduced costs of production. Avoid the challenge of worms by clean grazing and dosing ewes, then monitor lambs and treat only when necessary," he says.
Dr Vipond also advises taking faecal egg counts before spending money on wormers.
"The cost of the test for 30 lambs in a batch of 1000 is a great deal less than treating all the lambs at 20p a time for something they may not have. A lamb could be scouring from coccidiosis rather than worms and worming would be a complete waste of money."
Reducing stress at critical times in the sheep cycle is also advocated. "We now think that routine worming of ewes to counter the rise in worm egg counts before lambing may not be necessary. The rise in worms may have far more to do with stress than any change in the animals immune system.
"We have evidence that proper feeding with plenty of protein reduces worm egg counts in the period before lambing," says Dr Vipond.
Three weeks before weaning, he recommends dosing lambs with long-acting wormers. "Wean lambs back on to the same field they came from to reduce stress and they will still have adequate protection against worms while building up their own immunity." *