Scotland’s beef and sheep farmers are facing tough business decisions as financial pressures continue to bite.
Breeding ewe numbers were down 12,000 in the year to June 2014, according to the Scottish government’s agricultural census, while the number of beef cattle was down 2% to 713,000.
The collapse in beef prices, uncertainty about CAP payments and challenges with lamb consumption and efficiencies were causing beef and sheep farmers to “get round the kitchen table” for a serious review of their businesses, said John Sleigh, NFU Scotland’s beef and sheep policy manager.
Almost half of Scottish farms keep beef cattle and more than half keep sheep. Many would be questioning the value of keeping livestock as opposed to turning more land over to crops, said Mr Sleigh.
Some would be getting out of livestock completely or looking to downsize and reduce labour costs, while others would invest and upscale instead.
In response to the industry’s concerns, rural affairs secretary Richard Lochhead said the new CAP in Scotland would target support at beef and sheep.
“This includes having three regions for direct payments, new Voluntary Coupled Support schemes for beef and sheep and the new £45m beef scheme in the rural development programme,” he said.
NFUS dairy policy manager George Jamieson said dairy farmers would also be “having a good, hard think over the winter”, despite a growing herd. Dairy cattle numbers increased 3% to 274,000, an average of four extra cattle for every farm.
“Last summer there was a lot of optimism [in the sector] – at the moment [farmers] are at a crossroads,” he said.
After 18 months of good weather, many farmers had hung on to cows for longer than usual before culling, but falling farmgate milk prices were taking their toll on some producers.
The more business-savvy producers had invested heavily, with a long-term view of 10-15 years, and were expecting to ride out market volatility. But those who had waited to invest or did not have children to pass their business to would be questioning whether and how they would continue, said Mr Jamieson.