Welsh farmers 'struggling' despite lamb price gains

29 April, 2010

Lamb prices may be riding high, but Welsh farmers are failing to cover their costs. Figures released by Hybu Cig Cymru - Meat Promotion Wales (HCC) claimed that only the top third of Welsh sheep farms made a profit in 2008/09.

The study, compiled by the Farm Business Survey for HCC, shows the differing costs for the three types of sheep farms in Wales during 2008/09.

John Richards, HCC industry information officer, said: “It has taken a huge amount of research to separate these figures for the first time so that farmers in Wales can get a clearer picture of what the costs are.”

He said the report highlighted the importance of making savings on variable and fixed costs: “Knowing where your money is going is essential if you are to make savings.”

The average hill farm had the lowest cost of production at 152p/kg (€1.76/kg) liveweight, but they also recovered the lowest percentage of costs - just 84% - from their market returns.

Upland farms had an average production cost of 160p/kg liveweight and recovered 88% of expenses, while the average lowland farm had production costs totalling 155p/kg and recovered 95% of costs.

However the top third of farms in each category did achieve positive returns. Hill and upland farmers made a 6% profit while lowland farmers managed 29%.

The research found that feed and forage accounted for the biggest cost – between 30% and 32%.

>> Rising worry on lamb prices

>> Lamb prices reach record high

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