November 20, 2013

Scotland's sheep, cattle farming seen to be on upward trend next year

Buoyed by some improved performances, Scotland's sharpest cattle farmers appear to have weathered the storm well last year, according to the results of the annual enterprise costings report by Quality Meat Scotland (QMS).

Launching the 2013 edition of the Cattle and Sheep Enterprise Profitability in Scotland report, Stuart Ashworth, QMS Head of Economics Services, said that, for both sheep and cattle farmers, the outlook for the coming year was looking encouraging. There are, he said, some "green shoots" of an arrest in the decline of cattle numbers with indications that more female cattle are now being retained on farms.

Ashworth said there had been signs of ewe numbers starting to increase before the bad weather, and associated problems including fluke, hit confidence last season. He said it would take the industry time to recover again from this check but a good open winter in the coming months could help the process significantly.

This year's survey results continue to show significant variation in levels of financial and technical performance within the industry.

"Across some of the cattle enterprise types those in the top third reported higher margins in 2012 than those in the top third in 2011 even although the average margin fell in all cases," said Ashworth.

Ashworth pointed out this had been achieved despite the fact that the period the report covers - the 2012 calf and lamb crop year - was a time of very challenging weather conditions. These exceptional conditions challenged farmers' resilience in numerous ways - from higher feed and veterinary costs to changed sale profiles resulting in the sale of lighter animals.

Looking at suckler herds, those in the top third of gross margin per animal achieved higher output through higher calf rearing percentages and typically selling heavier calves resulting in higher yield per cow in the herd. They also typically received £0.04-0.09 (US$0.06-0.14) per kilogramme liveweight (lwt) more for the calves they sold. They also had lower herd maintenance costs.

"Suckler herds in the top third of financial performance were also characterised by strong control of variable costs. In all cases those in the top third had lower total variable costs than the average while achieving higher output. Fixed costs were also firmly controlled - in all cases top third producers had lower fixed costs per kilogramme of output even if, on occasion, fixed cost per cow was higher than the average," said Ashworth.

Looking at the sheep sector, Ashworth said those in the top-third of sheep producers similarly achieved higher outputs through higher stock performance. Typically they reared about 15-20 more lambs per 100 ewes than the average.