Sheep trade must act to force governments hand
By James Garner
ALL sectors of the sheep market have a bearish look and economists are predicting little respite for finished prices until the year ends.
That means producers may have to take radical action to make the government understand the dire situation the sheep industry is in, says National Sheep Association chief executive, John Thorley.
"We are lumbered with a government that allows sterling to reach a high level compared with other currencies, and combined with rules and regulations governing producers, it is impossible to compete."
Those serious about staying in sheep must weather the storm, says SAC economist Stuart Ashworth.
Woeful cull ewe values are forcing producers to sell them in pens rather than individually to cut commission costs. Despite this – and growing industry pressure – there will be no cull ewe aid scheme this autumn, says the government (News, Aug 13).
"There is little good news on the horizon for cull ewe values in the next 12 months. This could cause a welfare problem if they are kept on the hill," says Mr Ashworth.
"There is no logic in holding on to them, but if producers cant get a bid for them at market, how can they sell them? I suspect many will end up getting rid of them because there is no feed for them."
But low cull values are balanced out by cheaper replacement costs for flocks buying in stock, says Borders Signet consultant Robin Thomson. "The difference between cull values and replacements is probably lower than three years ago."
Finished lamb prices could have been worse, says Mr Ashworth, and quality lambs are still fetching a small premium. "Produce quality lambs at the right weight and specification for the market," he advises.
But MLC economist Lesley Green says the finished market could firm in November when there will be less competition from pigmeat and beef. "Skin values have also turned and will gradually pick-up to about £4-£5 a head," she adds.
However, producers must keep selling lambs when theyre ready for market, says Signets David Evans. "Holding on to them will increase variable costs from an extra drenching or extra fertiliser application, and extra interest on working capital.
"On a 33kg liveweight lamb, total cost – including labour and interest – is 130p/kg of meat produced. Therefore, you need a market price of 53p/kg, plus subsidies and wool, to break even."
But there are other lessons to be learnt before prices pick-up, says Mr Ashworth. "We need to get the product right to gain premiums, which are worth more when finished prices are low. Using breed improvement schemes can help improve meat yields."
But while prices are low, Mr Thorley says there may be opportunities resulting from the crisis. "Any sensible business person who understands the industry may have more chance to become involved as many large flocks sell up."
But he is wary of committing himself to more buoyant store lamb margins next year. "There are many things that can happen before then, such as interest rates increasing and sterling strengthening."
Hills need cull ewe scheme urgently
A GOVERNMENT backed cull ewe scheme is needed to prevent a welfare disaster on the hills this autumn, say producers.
Ayrshire hill sheep producer Kenny Donald of Blairpark Farm, Dalry, where he keeps 1300 Blackface ewes, says producers will have to sell cull ewes regardless of value because fodder supplies are short, but it could turn into an environmental disaster. "A cull ewe scheme is needed to prevent a welfare disaster. It will be unacceptable if producers have to start disposing of large numbers of cull ewes.
"We need action; there are so many regulations controlling production and yet there is no income coming back."
Scottish NFU livestock committee vice-chairman and upland producer David Mitchell agrees that post-BSE slaughter regulations are strangling cull ewe trade. "We are regulated out of business, we must free this trade up."
Ensuring all EU countries have the same specified risk material controls is a priority, and making some practical sense of the rules to ease pressure and stimulate export is needed, he says. *
On-farm calf kill against grain
DESTROYING healthy calves on-farm goes against producers and vets way of life, but one vet estimates there will be about 10,000 unwanted calves a year to put down in his practice area, after the ending of CPAS.
Andrew White, Penwortham, Preston, says producers are concerned about what to do with pure Holstein calves.
"No one has asked me to put calves down yet, but producers are wondering what to do and if they have the knacker on farm for another reason, some are asking him to take a few calves.
"Producers can cope if calves are taken away to be destroyed. But it goes against the grain to put calves down on farm."
Destroying healthy calves at a day old is not a prospect that the seven vets in his practice relish either, says Mr White. He is also worried about these animals welfare.
"I am concerned that unwanted calves will not be looked after properly and that they might be banged on the head, an unsatisfactory method of putting them down."
With limited beef export opportunities, Mr White believes the ending of the scheme was ill-conceived.
"I do not know whether the dairy industry can bear the cost of paying vets or knackers to destroy them and take them away." *
EBL info too slow
ALTHOUGH Great Britain was declared EBL-free on July 1, MAFF has been slow to inform the cattle industry and animals still have to be segregated at shows, which is ridiculous, according to a former Cattle Health Scheme member.
"Being declared EBL-free is good for the industry, and all cattle producers should have been informed," says Di Smith, Sladden Farm, Alkham, Dover, Kent.
Health scheme members, industry and trade bodies are being consulted by MAFF on its future. Two options are offered – closure or maintaining it, possibly as a privately-run scheme.
Mrs Smith does not believe there is a strong case for keeping the scheme. "Great Britain has been free from EBL for six years. Maintain-ing the scheme would result in a two-tier system of members and non-members when there is no disease risk."
Denis Leonard, of the Nantwich Vet Group, Cheshire, agrees that continuing with the scheme is pointless. "It was never pushed for by practising vets." *