The true cost of producing beef cattle and sheep on English farms was revealed today (Friday) in new costings data published by the English Beef and Lamb Executive (EBLEX).

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With the support of the industry, the 2005/2006 farm costings data contained in the latest edition of EBLEX Business Pointers does not include the Single Farm Payment, and also incorporates a number of non-cash costs.

Taking these elements into consideration, the statistics show that average beef producers are making a loss of between £74.37 and £425.39 per head and average sheep producers are losing between £2.45 and £49.25 per head.

EBLEX Chief Executive Richard Ali said: “These figures make for uncomfortable reading, but are the first to treat the farm business on the same financial footing as any other business.

“EBLEX firmly believes these figures provide a sound starting point for everyone involved in the industry to understand what needs to happen to achieve a more sustainable future for the beef and lamb sector.”

Mr Ali stressed that although a sustainable future was not just about price, retailers could play their part in building a profitable supply chain: “Consumers have sent clear signals that they want to buy quality, home – produced assured beef and lamb.

“Ensuring that product is clearly differentiated on retail shelves is vital both to help shoppers to make informed choices and ensure the much talked-about reconnection of the beef and lamb chain really does happen - because the reality is that imported meat does not help maintain the English countryside.”

The wide performance gap between the top third and average producers in Business Pointers clearly shows there is scope for the critical mass of farmers to look at their costings and work out where positive changes could be made.

“That is where the EBLEX Better Returns Programmes for Beef and Sheep can help producers. These programmes highlight simple, practical advice in a number of areas where farmers can make a real difference to their returns,” added Mr Ali.

The fourth edition of EBLEX Business Pointers is available to download from www.eblex.org.uk

Notes:

Non cash costs included in the 2005/2006 edition of EBLEX Business Pointers include the value of family labour (calculated at £11.18 per hour), the imputed rental value on owner-occupier land and the interest on working capital.

The value of family labour on farm is the subject of a Family Labour Survey, part-funded by EBLEX and published in November 2006. The survey is available to download from www.eblex.org.uk.


EBLEX Business Pointers 2005/06 Average cattle non-cash costs figures

England Lowland Suckler Herds (Average costs £/head)
Unpaid family labour £109.96
Rental equivalent on owner occupied land £36.14
Interest on working capital £41.09

England LFA Suckler Herds (Average costs £/head)
Unpaid family labour £184.65
Rental equivalent on owner occupied land £28.54
Interest on working capital £42.11


England Intensive Finishing (Average costs £/head)
Unpaid family labour £30.99
Rental equivalent on owner occupied land £6.33
Interest on working capital £17.47

England Extensive Finishing (Average costs £/head)
Unpaid family labour £73.45
Rental equivalent on owner occupied land £20.45
Interest on working capital £15.25


EBLEX Business Pointers 2005/06 Average Sheep non-cash costs figures

England Lowland Flocks Average costs £/head)
Unpaid family labour £11.49
Rental equivalent on owner occupied land £17.42
Interest on working capital £6.92

England LFA Flocks (Average costs £/head)
Unpaid family labour £19.48
Rental equivalent on owner occupied land £2.05
Interest on working capital £6.88

England Store Lambs (Average costs £/head)
Unpaid family labour £2.69
Rental equivalent on owner occupied land £0.54
Interest on working capital £0.71

Net margins for average producers in 2005/06 (including non-cash costs)
England Lowland Suckler Herds £351.56 loss/head
England LFA Suckler Herds £425.39 loss /head
England Intensive Finishing £74.37 loss/head
England Extensive Finishing £262.94 loss /head

England Lowland Flocks £49.25 loss/ewe
England LFA Flocks £41.76 loss / ewe
England Store Lambs £2.45 loss /lamb

EBLEX is an industry-funded statutory organisation that acts to help the English beef and lamb industry boost its competitiveness and promote its products.
Its aims are:
· To encourage better returns for the English beef and lamb industry
· To stimulate a profitable demand for quality beef and lamb
· To champion the development of a sustainable industry through improved profitability.

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