Low prices take all the fun out of selling pigs
Pig prices are heading
upwards at Dowrich. None
too soon, say the Lees,
though they wish milk values
would follow the same path.
Tim Relf reports
STOCK sold through Western Quality Pigs made 78.25p/kg dw last week.
That is a marked improvement over last years low point of less than 60p/kg but it is still well below 95p/kg, the figure Anthony Lee considers to be break-even level. "Its no fun selling pigs when you know every time a lorry leaves the farm, its costing you money," he says.
The price upturn is a result of the nationwide shortage and the big retailers policy of sourcing more British meat, he reckons. "The crunch will come if domestic supplies fall drastically and the meat is available a lot more cheaply on the Continent. Thats when imports will be really tempting."
The upturn in the finished market is paralleled in the weaner business. "Theyve gone up a disproportionately large amount, as people anticipate that by the time the animal is slaughtered, the market will have risen even more."
And weaner supplies are tight after large numbers of farmers who traditionally sold them to finishers quit the business faced with last years abysmal returns. For many of these producers it was a secondary enterprise, with no commitment to high-cost specialist buildings. "Those people are quick in and quick out of the business. They were the hardest hit early on in the crisis. There was a time when three-week-old weaners were changing hands for just £1.
"Its at times like this Im glad I breed my own stock," says Anthony. "Youre in a stronger position than if you rely on somebody else to do part of the job for you. Every time an animal changes hands, somebody wants to make a margin on it."
Cull sow values are also on the up. In December, two at 140kg dw went for £28 apiece, while the latest one in February – at 118kg – made £38. That marks a rise from 23p/kg to 36p/kg dw. "Its export driven," says Anthony.
But milk markets remain under pressure, resulting in a February price of 19.65p/litre at Dowrich. With the Mar 31 end of the milk year looming it now looks unlikely that the herd will exceed quota. Even hitting it could be a struggle. "Its unusual for us to be in this position," says Anthony.
Cows did not milk as well as hoped, a legacy of variable quality silage. "The winter diet has not been stable. We have had to chop and change between silage from different cuts and different years."
Intervention Board output figures – later revised downwards – suggested at one point that national production was higher than was really the case. "We might have turned the taps on sooner and harder had we known the true picture," says Anthony.
Not all the 40,000 litres of quota leased in December for 9.5p/litre may be needed, it now seems. "If we hadnt spent the money on that we could have put it towards reducing the overdraft. And every £1 off that is £1 less to pay interest on."
At this late stage the options for upping output are limited. "We could pump the cows with cake but theyd take a while to respond. If we were to buy more, that would cost a lot of money – maybe £700 or more each – and they would still take time to settle in."
There is little chance of the Lees getting a superlevy bill this year, unlike the past when cows have been dried off to reduce output. In one year, milk was even fed to pigs in a bid to cut deliveries. With national output struggling to reach quota, the likelihood of super-levy for anyone is slim, says Anthony. "If I was 3% over quota this year, I wouldnt be losing much sleep over it."
Meanwhile, spring finally looks to be on the way, with turnout planned for the end of the month. "Thats about normal," he says. "Last year, however, the cows were out by day in the middle of the month. If we had tried that this year they would have turned the ground into a mudbath." *
• A 235ha (580-acre) family farm in mid-Devon, run by Anthony Lee, his father Michael and his brothers, Roger and Christopher.
• Dairy herd of 220 Holstein Friesians averaging 5800 litres a year.
• Outdoor pigs reared from 220 sows.
• Potatoes grown on the farm and on rented land.
• Strong emphasis on co-operative marketing.
Pensions will be favourite for IR scrutiny
PENSION contributions will be one of the taxmans favourite targets this year so farmers should check figures closely, warns Nick Dee of Gloucester-based accountant Hazlewoods.
"According to a senior tax inspector, almost one-in-ten taxpayers claiming relief for pension payments failed to pay the amount shown on their tax return. With the Revenue targeting areas likely to give the highest return of extra tax, this area will be closely checked."
The Revenue should be notified of mistakes immediately to avoid the risk of costly penalties and extended inquiries, he advises. *
Bread and blend
wheats suit EC
UK growers should aim to supply Continental millers with bread and blending wheats as well as more established biscuit wheats, says British Cereal Exports.
Group 2 varieties like Charger and Abbot suit both markets at the right price, according to BCEs latest leaflet Wheat Exports – The Growers Guide 1999/2000. Other wheats like Claire, Consort and Riband are in demand by millers for blending.
The guide rates varieties for export according to quality tests, commercial experience and millers preferences. It also indicates which recommended list candidates are likely to make the grade. Copies are available on 0171 520 3925. *
Watch water regs
THE new Groundwater Regulations 1998 which come into effect at the beginning of next month must be taken into account when buying land, advises Graham Smith of solicitor Roythorne & Co.
A preliminary inquiry should be raised when land is purchased to find out whether any authorisation for, and details of, disposal or tipping exist.
"Steps will need to be taken to transfer the authorisation to the purchaser. On a transfer of land, notice must be given by the transferor to the Environment Agency within 21 days. On death or bankruptcy, notice must be given within 15 months, otherwise the authorisation will lapse," he warns. *