Better deal for farmers

A report that examines the true costs of beef and sheepmeat production is to be published by EBLEX this week, in the hope it will get farmers a better deal.

EBLEX Business Pointers 2005/06 is the fourth such annual report, and paints a bleak picture, showing that most farmers make a loss. In the most dramatic example, farmers are losing an average of £423.39 per head, when farming suckler herds in less favoured areas, such as hills and upland.

Lowland suckler herds lose farmers an average £351.56 per head, and even intensively finished cattle still lose farmers an average £74.37 per head.

The picture with sheep is also grave. Lowland flocks lose farmers on average £49.25 per ewe, and even the average store lamb does not make a profit, losing farmers £2.45 per ewe on average.

It is the first report that has taken into account costs that are rarely reported. These are: family labour, calculated as the cost of employing workers were this source of unpaid labour not available; interest not earned, calculated as the amount of interest that would be earned if the assests of the business were in a bank and not tied up in livestock; and rent, calculated as the costs of renting farm land if the farmer did not own his own land.

When these factors are taken into account, few beef and sheep farmers make a profit. However, the large gap between the best and worst businesses in each category shows there is an opportunity for improvement.

This year's edition of Business Pointers includes case studies showing how both lowland and upland producers have made changes as a result of studying their costs.

Richard Ali, chief executive of EBLEX, thinks Business Pointers will help farmers become profitable: "It acts as a road map for individual farmers to start comparing where they are with where the industry is and to start saying 'this year I'm going to improve the genetics of my animals do they can better meet market requirements,'" he said.

He also thinks it will help the rest of the chain: "By publishing this very transparent picture of costs it will help the rest of the supply chain understand what it needs to do to build a sustainable home livestock sector.

"Certainly all the multiple retailers I've heard, all the big foodservice companies I've heard, all the big maunfacturing companies I've heard, they all understand that their consumers, their customers want home-produced beef and lamb. That is their preference, and they all want to start to help put in place the changes that they need to do to build a sustainable supply chain, so this is useful for both farmers, but more broadly it is useful for the whole supply chain just to understand what drives sustainability within the sector," he said.

The report is available on EBLEX's website:

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