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Growing Gap Shows Value of Faster Store Finish
19/09/05

The value of faster, earlier store finishing in the modern lamb market has been highlighted by the growing gap between the profitability of average and top-performing businesses revealed in the latest annual enterprise costings from the English Beef and Lamb Executive (EBLEX).

The 2004/5 costings results from 37 recorded store lamb finishers across the country show the average business earning a net margin after all costs with the exception of unpaid family labour of £2.66/head - a good £1/head less than the £3.81 earned in 2003/4.

In complete contrast, top third performing businesses increased their average net margin by nearly £1/head - from £8.62 in 2003/4 to £9.58 last year - widening their advantage over the average from under £5/head to nearly £7/head.

More detailed analysis of the results underlines the particular importance of lamb buying and selling as much as production efficiency in the overall profitability equation.

The average finisher, for example, achieved a higher output per lamb and superior daily liveweight gain than the average top third performer. However, the better performers bought their lambs for less at lighter weights than the average and, most importantly, also marketed them lighter, having put on much less weight in a markedly shorter finishing period.

This enabled them to sell lambs better suited to the market into a stronger trade earlier in the New Year. In contrast, those who kept stock longer found increased levels of chilled imports keeping a lid on prices and produced notably heavier lambs than the market required. Overall, therefore, the better performers achieved far better returns per kilo of weight gain.

The shorter feeding period of the top third performers also meant noticeably lower feeding, labour, land and property costs, in particular, adding to their financial advantage.

EBLEX English Store Lamb Finishing Enterprise Costings
(2004/5 vs 2003/4)

Average

Top Third

2003/4

2004/5

2003/4

2004/5

Liveweight gain during finishing (kg)

10.0  

25.4

12.6  

19.0

Feeding period (days)

72 

121

85 

103

Liveweight gain (kg/day)

0.14 

0.21

0.15 

0.18

Lamb output (£/head)

45.46

44.56

47.95

43.87

Output after lamb purchases (£/head)

11.69

11.26

15.79

17.02

Variable costs (£/head)

4.70

4.34

4.14

4.20

Fixed costs (£/head)

3.18

4.25

3.03

3.23

Net margin (£/head)*

3.81

2.66

8.62

9.58


* Excludes the value of unpaid family labour

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