scene & herd (8 December)

08 December, 2006

usiness Pointers is the latest publication of figures from EBLEX, which shows some very stark losses by beef and sheep producers for 2005/2006.

Business Pointers is the latest publication of figures from EBLEX, which shows some very stark losses by beef and sheep producers for 2005/2006.

Beef suckler producers, on average, made net margin losses of between £425 and £351 a head. Sheep producers made a loss of between £49 and £41 per ewe. You might want to read that again, just to let it sink in!

Early commentary on the figures by the great and good suggest that, while stark and sobering, the future for farmers is positive! But I find it a struggle to see any positive conclusion from this set of data.

You could conclude that the last one out should be asked to switch the light off on UK beef and sheep production. Producers always knew that a decoupling of subsidy from production could mean exactly that. It's a concept that more in our supply chain need to grasp very quickly. We can all look at the data that Business Pointers provide and make slightly different interpretations upon it.

Some will be readjusting their estimates of what the farm gate prices now need to move to. If you believe that the marketplace must make up the shortfall, then beef will need to raise a further 125p per dwkg (340kg carcase) and lamb 245p dwkg (20 kg carcase) for the average. Not achievable.

If you believe fixed costs are where producers need to concentrate, then the LFA suckler producer will need to remove all his fixed cost, as defined in EBLEX data, to scrape to a positive margin. Not achievable.

I may be accused of being slightly extreme and selective in the examples I choose, but the message is clear. The amber light is flashing bright for all the supply chain to see. Producer, processor and retailer need to act now. Margin for all in the supply chain is the key to our future business together.

Thomas Binns,

Beef and lamb farmer, Lancashire and NFU livestock chairman





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