Welsh farmers 'struggling' despite lamb price gains

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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