EBLEX report shows beef and sheep farmers losing money
Many beef and sheep producers made a net loss after all costs in the year to the end of March 2010, according to the latest costings from the EBLEX Business Pointers series.
Coupled with this, production costs have already risen by up to 4.7% this summer and while finished lamb prices are higher than a year ago, beef margins are under even more pressure, farmers at the EBLEX annual conference heard this week.
Lowland suckler herds averaged a loss of £269 a cow after all costs including unpaid family labour, rental value of owned land, and interest on working capital, said AHDB senior analyst Mark Topliff.
This loss was £10 a head more than last year.
EBLEX calculated costs on a per-kilo basis for the first time in Business Pointers this year. These show that in the year to March 2010, lowland suckler beef cost 273p/kg liveweight to produce. But rising costs since then mean the comparable cost to date this year (since 1 April) is 285p/kg lw.
Beef farmers in the top third of 72 lowland suckler herds in the study lost almost £86 a cow although in contrast to the average performance this was a considerable improvement over last year’s loss of £107 a cow. Although sale prices were up and more calves were reared, more concentrate feeds had been used and power, machinery and labour costs had also risen.
Top-third intensive finishers were the only cattle group to record a net profit at £63 a cow, compared with £137 a cow the previous year. They had higher store purchase prices than in the previous year but saw better sales prices and concentrate feed costs. EBLEX has updated costs since March and these show it is costing these producers 294p/kg deadweight to produce these beasts.
Extensive finishers lost £236 a cow among the average performers. “This group is probably the most concerning,” said Mr Topliff. “They have had a 19p/kg increase in production costs so far this year.”
Among the sheep systems costed, only the store finishers made a net positive margin, with average flocks making £10 a lamb and top third flocks making £26.47 a lamb.
Lowland sheep breeding flocks lost an average £31 a head but top-third flocks managed to stem the loss to £10 a head.
The costing cover 130 suckler herds, 120 beef finishers, 119 breeding ewe flocks, 46 cattle rearer-finishers and 47 store lamb finishers.
Data is taken from farm management accounts, and fixed costs are allocated to individual enterprises. Figures are calculated excluding single payment income.