Farm Assurance Adds Extra Sheepmeat Value
02/11/05

photo courtesy of www.jennifermackenzie.co.uk

Farm assurance is generating valuable extra income for English sheep producers, according to the first-ever national assessment of its commercial value undertaken over the past few months by the English Beef and Lamb Executive (EBLEX).

Involving all English auction markets reporting price information to MLC, the study analysed the throughputs of and prices realised by all farm assured and non-farm assured new and old season lambs and cull ewes sold between January and August 2005.

As well as enabling firm figures to be placed on the financial value of farm assured English sheepmeat, it has established the basis for daily reporting of farm assured and non-farm assured stock values for each market from this month at www.eblex.org.uk

All told, 68% of the new season lambs sold through the 90-plus price-reporting auction markets in England over the 8-month period were farm assured.  On average, these lambs realised a 2.77p/kg differential over than non-farm assured stock.

At an average liveweight of 41kg, this represented an extra return of £1.14/animal - worth over £1.5 million/year on the basis of all new season lambs currently sold through English marts.  On the same basis, the 32% of new season lambs sold as non-farm assured can be calculated to be losing producers more than £700,000/year in potential income.

The highest differentials - of more than 4p/kg - were recorded in the Midlands, with the lowest evident in the North of England, probably because the initial study period did not include the main autumn sales season for the later lambing flocks in this part of the country.

Despite a study period also less than ideal for their marketing seasonality, farm assured old season lamb sales records revealed an average differential of 0.7p/kg or 29p/animal over non-farm assured animals. Substantially higher differentials were evident over the main marketing season in the first half of the year and in the South West region in particular.

Valuable differentials averaging £1.10/head were also recorded for farm assured cull ewes. Although they were over £7/head in the Eastern region, this probably reflected the very small proportion (12%) of the ewes marketed during the study period that were farm assured.

Price Differentials for Farm Assured Stock in English Auction Markets
(Jan-Aug 2005)

Based on an average cost for farm assurance of £73/unit, these figures show a clear cost:benefit from farm assurance for all English businesses selling 65 or more lambs for slaughter each year.

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