Cashflow woes as stock numbers swell

By Robert Harris

CASHFLOW problems are building on farms around the country as stock numbers swell after the foot-and-mouth outbreak.

Prices are also likely to slip once markets reopen, says David Turner of accountant PricewaterhouseCoopers.

Pig farmers face immediate losses due to the current movement restrictions, he says.

The problem on beef and sheep farms is less acute, but could escalate if restrictions remain in place for longer than the three weeks already announced by farm minister Nick Brown.

“The government hopes to put some form of limited marketing scheme into place, but I cannot see how it can work on any scale.

“My gut feeling is that most farmers will be unable to move stock for at least two more weeks, probably longer.”

Pig numbers will build quickly, he says.

“A traditional, family-run 600-sow unit would normally sell 54,000-worth of pigs over three weeks. Add on extra feed, housing and veterinary costs and you could be looking at 65,000.”

Once selling resumes, many pigs will be too heavy and numbers will also drive prices down.

“Producers may only get two-thirds of the prime value,” says Mr Turner.

Beef prices are likely to stick at or near pre-foot-and-mouth levels, but lamb prices, much influenced by exports, are vulnerable.

Government plans to pay 152 million of agrimoney compensation and bring forward pig restructuring scheme cash will not alleviate cash problems, says Mr Turner.

“It is a drop in the ocean, and we are talking months before it hits individual farmers accounts.”

Cattle farmers with animals nearing 30 months old are also at risk.

About 1000 prime beef animals have been entering the scheme each week, and it could build, says Duncan Sinclair of the Meat and Livestock Commission.