Support payments still essential for Scottish livestock farm finances

Support payments remain vital to keeping Scottish livestock farms in the black, Quality Meat Scotland’s annual profitability report has shown.

The levy board revealed that most businesses saw an improvement in margins per cow or ewe in 2013, as better store and prime stock prices made up for the bad spring weather.

But the average net margin remained negative for all systems, except those finishing cattle on cereals, lowland sheep flocks and store lamb finishers.

See also: Better prices all in the finish, livestock farmers told

Just one-third of suckler herds reported a positive net margin, though this was up from 22% the year before, while only one-third 10% of hill flocks achieved one, down from 19% in 2012.

Finishers of store cattle and lambs had the best performing systems, with 72% and 75% making a positive net margin respectively.

QMS head of economics services Stuart Ashworth said he was pleased to see how the industry had weathered the tough conditions earlier in the year, as he had been worried about the impact of higher lamb and calf mortality and greater feed demands.

“The report does continue to highlight the value of support, particularly to the more extensively farmed units of which there are many in Scotland,” he said.

Mr Ashworth said the main differences between the top-performing herds and flocks and the average were high technical performance, strict cost control and maximising returns from the market.

He said that in a year of better finished stock prices, the top third of producers were able to take extra advantage.

“They get better returns, either by recognising the market signals for what the market requires or if they have better performance they have better animals to sell,” Mr Ashworth said.

“[Scottish farmers] are recognising that the success of their businesses long-term will be most influenced by their ability to make the best use of their land resource rather than CAP support.”

The results in different systems were:

• Less favoured area hill sucker herds returned an average net margin of -£96 a cow, with the top third making £22 a cow
• Upland suckler herds selling weaned calves returned an average net margin of -£124 a cow, with the top third losing £7 a cow
• Upland suckler herds selling yearling calves returned an average net margin of -£103 a cow, with the top third making £121 a cow
• Lowland suckler herds returned an average net margin of -£68 a cow, with the top third making £118 a cow
• Rearer-finisher herds returned an average net margin of -£67 a cow, with the top third making £200 a cow
• Cereal-based finishers returned an average net margin of £126 a cow, with the top third making £293 a cow
• Forage-based finishers returned an average net margin of -£48 a cow, with the top third making £39 a cow
• LFA hill flocks returned an average net margin of -£23 a ewe, with the top third losing £11 a ewe
• Upland flocks returned an average net margin of -£3 a ewe, with the top third making £28 a ewe
• Lowland breeding flocks made an average net margin of £27 a ewe and store lamb finishers made an average of £4 a lamb

The survey covered 72 breeding ewe flocks, 116 suckler herds, 14 store lamb finishers and 50 business finishing store cattle.

Free copies of the survey are available on the QMS stand at AgriScot this week and on the levy board’s website.