Exodus warning from farmers

23 November, 2007

Official figures published today (Friday) have confirmed that most beef and sheep farmers were making heavy losses even before the sector was rocked by soaring feed prices, foot and mouth disease and bluetongue, the National Farmers' Union has claime

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The "Business Pointers", produced by Eblex for the financial year ended March 2007, show the average beef producer losing between £94 and £430 per head and the average lamb producer in the red to the tune of between £0.65 and £36 per head.

The NFU pointed out that the economic situation for livestock farmers had since gone from bad to worse, and said that the figures reinforced the need for a swift and substantial uplift in prices.

"Where we are is not a sustainable position," said NFU Livestock Board chairman, Thomas Binns.

"Either prices must rise, or we'll see an exodus from beef and sheep production the like of which we've never seen before.

"These figures spell out far more clearly than any words could do why we launched the Why Beef and Sheep Matters campaign.

"We desperately need people to understand both how serious the situation is and how much is at stake, so as to achieve the step-change in producer prices which is what is required to turn the sector around."

The Eblex figures are bleakest for livestock farmers in the hills and uplands, with Less Favoured Area suckler beef producers losing over £151 per cow on their beef enterprises and £11 per ewe on sheep. The losses are even heavier if so-called "non-cash costs" like unpaid family labour and interest on working capital are included.

But the situation on lowland livestock farms is little better, with suckler beef producers losing £148 per head, intensive beef finishes down by £20/head and lowland breeding flocks making a loss of £15.75 per ewe.

With almost all systems, the losses are worse than in the previous year, despite a modest improvement in the beef price and some significant progress in containing fixed costs like power and machinery.

Commenting on the figures, Eblex's chief executive, Richard Ali, said: "Farmers are getting better at what they do. Unfortunately, the current market is obscuring the gains people have made."

The NFU's Why Beef and Sheep Farming Matters campaign, launched in London last week, aims to harness consumer support in putting pressure on supermarkets to start the process of lifting beef and lamb prices to levels that will allow farmers to make a profit and keep beef cattle and sheep in the countryside. It is supported by a range of other organisations, including the National Council for Women, the Townswomen's Guild and the Campaign for the Protection of Rural England.

The latest Defra agricultural census figures indicate that the losses being made by livestock farmers are already leading to a steep decline in cattle and sheep numbers in England, with the number of beef cattle under one year old down by 4.5% in June 2007 compared with 12 months previously, and the sheep breeding flock down by over 5% year-on-year.

Meanwhile, while livestock farmers have been enduring further misery, as a result of soaring feed costs and foot and mouth and bluetongue restrictions, the supermarkets have been cashing in, with the gap between the producer price of beef and the average retail price higher in every month since March 2007 than in the equivalent month a year previously, according to the Meat and Livestock Commission.

With lamb, whilst prices to the farmer have fallen by around 25% since July, retail prices have been unchanged, so giving a further boost to supermarket profit margins.





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