Livestock Event 2014: Beef and sheep businesses need to change

Livestock enterprises need to restructure radically to cope better with tougher trading conditions, according to farm business consultant Andersons at the 2014 Livestock Event.

The company has warned that weak markets will hit returns for beef and sheep businesses this year and CAP reform will only add pressure. 

Meadow Farm, Anderson’s model mixed livestock enterprise, is forecast to record a £203/ha loss from production in 2014-15, worse than last year’s £156/ha deficit.

This would give a business surplus of £34/ha after SPS support was included, down from £88/ha a year earlier.

Higher lamb prices and reduced feed and fertiliser costs would be unable to balance the struggling beef market, where deadweight prices are already down more than 70p/kg on the year.

Better growing conditions means the gross margin on the arable part of the business is forecast to improve from £726/ha to £783/ha, despite grain prices weakening further.

Andersons’ Oliver Lee said Meadow Farm needed subsidy payments every year to turn a profit, having now made a loss from production in the last four years.

He said overheads were too large for the business’ output and it had many enterprises at less than efficient scale.

See also: All the coverage from the Livestock Event 2014