SCOTLAND’S LIVESTOCK sector suffers from a continued divide between the top third efficient and profitable producers, and the bottom third struggling to make returns cover costs.
Highlighted in the 2015 edition of “Cattle and Sheep Enterprise Profitability” published by Quality Meat Scotland, survey results for the 2014 calf and lamb crop show significant variation in levels of financial and technical performance within the industry.
QMS head of economics services Stuart Ashworth said: “Top producers continue to be characterised by high physical, or technical, performance; strong control over costs; and maximising returns from the market place.”
Of the suckler herds surveyed, those in the top third of gross margin per animal achieved higher output through higher calf rearing percentages, combined with selling heavier calves resulting in higher yield per cow in the herd: “Variable costs per kg of calf reared were lower among the top third and fixed costs were also firmly controlled. In all cases top third producers had lower fixed costs per kg of output even if, on occasion, fixed cost per cow was higher than the average,” said Mr Ashworth.
Turning to the sheep sector, he said those in the top-third of sheep producers similarly achieved higher outputs through better stock performance. Typically they reared about seven to 15 more lambs per 100 ewes than the average.
“Although they did not necessarily rear lambs to the heaviest weights, the larger lamb crop typically resulted in top-third flocks selling five kg lwt more lamb per ewe. They also typically sold the highest proportion of lambs for immediate slaughter. The net effect of this was that income per ewe from lamb sales was £13 - £14 per ewe more than the average.”
Looking at the general trends during 2014, Mr Ashworth said the calf and lamb crop benefitted from a much-improved season weather-wise resulting in a general improvement in profitability among sheep farmers, although the position in the beef sector remained challenging.
“Calving and lambing was a more positive period than in 2013 and mortality rates at birth were much reduced, while among sheep flocks ewe prolificacy was much improved,” he observed. “Additionally, feed and forage was in much better supply and animals thrived better than in 2013 and the increased availability of feed and forage contributed to animals generally being sold at higher weight.”
Despite generally lower costs of feed and forage, largely due to lower purchased feed requirement and lower purchased feed costs, other costs continued to increase, he noted. Cattle producers selling prime stock in particular found it difficult to recoup this extra cost from the marketplace.
“Only 29 per cent of store cattle finishers achieved a positive net margin, down from 72 per cent the previous year, while among rearer-finishers the number achieving positive margins halved in comparison to 2013,” he said.
- For in-depth news and views on Scottish agriculture, see this Friday’s issue of The Scottish Farmer or visit www.thescottishfarmer.co.uk
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