English flocks profit without subsidies

Many English sheep flocks have a viable future without subsidies, particularly those in less favoured areas according to the latest figures from EBLEX, with the top third of LFA flocks achieving a net margin excluding subsidies of £17/head.

Critical to this success was maximising the number of lambs reared a ewe and selling more lambs as slaughter lambs rather than as stores, says MLC economics manager Duncan Sinclair.

While lowland flocks outperformed their LFA counterparts in physical terms, producing more lambs/ewe and selling more lambs for slaughter, it was LFA flocks which performed best financially.

“Margins were similar to last year for lowland flocks at £14/head, compared with £16/head in 2003/04. But for less favoured area flocks they were much improved, with the top third LFA flocks achieving a margin of £17/head in 2004/05, compared with just £9/head in 2003/04.

For these LFA flocks rearing more lambs a ewe was a major factor in their success, with the best flocks rearing an average of 151 lambs/100 ewes, compared with the average of 129 lambs/100 ewes, explains Mr Sinclair.

“Many of these lambs were sold as breeding sheep which yielded higher sale prices than the year before. These returned an extra £10 a ewe, compared with the year before.”

“And, at no extra feeding cost LFA flocks managed to sell 58% of their lambs to slaughter and 23% as stores, compared with 40% and 36% respectively in the average flocks.

EBLEX Top Third Performing English Ewe Flock Enterprise Costings (2004/5 vs 2003/4)

Lowland Flocks  Less Favoured Area Flocks
  2003/4  2004/5 2003/4 2004/5
Flock size 410 447 611  441
Lambs reared per 100 ewes 159  155 151  151
% lambs sold for slaughter  61%  63% 51% 58%
Total output (less replacements) £86/head £83/head £78/head £92/head
Variable costs £24/head  £22/head  £19/head   £20/head
Fixed costs  £33/head   £33/head £33/head  £36/head
Net margin *  £29/head  £28/head   £26/head  £36/head
Subsidies  £13/head £14/head  £17/head  £19/head
Net margin excluding subsidies *  £16/head   £14/head  £9/head   £17/head









  * Excludes the value of unpaid family labour