Value of sheep quota drops
Value of sheep quota drops
SHEEP quota prices failed to rally as the trading period closed earlier this week (Feb 4).
Approximate sale values were £7 or £8/unit for GB lowland samples, with lease quota worth just over the £1-mark. English LFA, meanwhile, was selling for £37, and leasing for £8.
Agents reported different levels of activity. Most, however, agree demand has been limited by the lower premium payment expected in 1997 and last years change to a single retention period, ending in mid-May.
According to Nigel Astbury of Townsend, some farmers are now claiming premium only on their younger ewes, giving them the freedom to sell older ones at a time dictated by market prices, rather than retention period constraints.
Richard Hyde of Sunderlands says interest in Welsh LFA quota has been hit as farmers devote more land to cattle to gain the extensification payment.
So much so, in fact, that whereas such quota typically "rallies" in value at the end of the trading period, it fell this year.
With GB lowland quota falling late in the season, the message for lessors next year is act early, rather than delaying putting it on the market.
Caroline Carr of Ian Potter Associates says the lower values of lowland quota reflects the changing farming pattern of "sheep staying in the hills, but coming off the lowlands".
The quota and premium system may, therefore, increasingly favour the "genuine" sheep farmer who keeps a breeding flock and fattens lambs, rather than a lowland farmer who, for example, keeps a flying flock, she says.