Tuesday, 15 January 2013

Difficult Times For Sheep Farmers

After a few good years, sheep farmers have come down to earth with a bang as prices have slumped. Last week lamb was worth 338p/kg as compared to 456p/kg a year ago and as a result it is estimated farmers are losing approximately £29/head.

In this area this is being made even worse by Schmallenberg disease about which I wrote a few weeks ago. The virus which causes the disease is carried by a midge which passes the virus on to the ewe which can then cause foetal abnormalities and abortions.

This seems to be affecting early lambing flocks in this area indicating infected midges were circulating in this area last summer. We now wait to see whether ewes which are about to lamb during the main lambing season over the next few weeks will also be infected. If so this, combined with the fall in market price will cause real problems for many sheep farmers.

What is so frustrating for farmers is that as the farmgate price of lamb has fallen, domestic demand for lamb in the year to November has risen by 3.8% while the percentage of the retail price received by farmers has fallen to 45%, the lowest proportion since 2009.

Despite the domestic demand the problem is that imports have increased; according to EBLEX, an organisation representing beef and lamb producers, by 27% in the year to October. Most of this lamb is from New Zealand and much of it is being sold in our supermarkets. As a consequence sheep farmers are calling for supermarkets to treat them fairly.

Both Tesco and Morrisons have confirmed they are committed to offering customers a range of options for all budgets which includes both British and New Zealand lamb. However, Sainsbury’s has announced that the 800 famers in its Lamb Development Group will receive a premium price of 380p/kg which is obviously good news for those in that group.

There is also concern that because of the bad weather there are still a lot more lambs from last year to come on to the market as farmers have struggled to fatten lambs over the autumn and early winter. Greg Mowbray who is the Managing Director of the livestock marketing group Meadow Quality commented, “There are a lot more lambs still on farm due to the poor weather, with slaughter numbers 600,000 behind the same time last year”

Thus it seems sheep farmers have a tough year ahead with little prospect of price rises in the short term and ongoing concern regarding the Schmallenberg virus; not a very auspicious start to 2013.

James Stephen MRICS FAAV
Rural Practice Chartered Surveyor, Wells

T: 01749 683381
E: james.stephen@carterjonas.co.uk

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