Average Welsh lamb unit has failed to cover costs

Welsh lamb producers on average have failed to cover production costs over the past year, new figures reveal.

Data collected during Aberystwyth University’s annual farm business survey showed average costs, at 133p/kg, exceeded the market price by 22p/kg.

While the top third of farms achieved a margin of 13p/kg, the bottom 33% of units saw end prices trail average inputs by 52p/kg.

The detailed production cost figures were put together on behalf of Hybu Cig Cymru (Meat Promotion Wales) to assess whether producers could make a profit from lamb production after decoupling.

Prys Morgan, HCC’s industry development manager, said:

“The results clearly indicate that in a post-decoupling environment the top third of producers can cover their costs.”

But the gap between the top and bottom third of producers remained substantial.

One important factor was that the most efficient units spent just 45p/kg on fixed costs.

That was about half the amount spent by the bottom third and well below the all-flock average of 63p/kg.

The top farms spent 16% less than the bottom third on feed and forage, 33% less on veterinary and medicine costs and the equivalent of 8p/kg of finished lamb on flock replacements.

Overall, the average flock surveyed reared 1.28 lambs a ewe, or 49kg of finished lamb a ewe.

The best units achieved 1.42 lambs or 58kg of prime lamb on the best units, compared with the least efficient at 1.11 lambs and 39kg of saleable lamb a ewe.

The figures will be highlighted at the Royal Welsh Show, where HCC will urge producers to take a detailed look at fixed costs, use a health plan to reduce veterinary bills and cull ewes that do not lamb easily, or have mastitis or foot problems.