Market prices for breeding stock and lambs are high and look like they will remain so for the foreseeable future according to Sandy Hay, Head of Agriculture for Bank of Scotland and the event sponsor.
"The outlook for the sheep sector looks promising with prices having stabilised at a higher level than previous years despite the shift back in sterling's value versus the euro over the last couple of years. We have also continued to be competitive in our exports to important European markets," Mr Hay said at the recent Scotsheep launch.
He added that the sustained stability in prices for a good two years has brought with it confidence in the sector to develop livestock-based businesses, but he said he does not anticipate this creating significant or widespread investment in sheep enterprises. "We are seeing planned investments on farms for things like building improvements and handling facilities, where the recent prices have brought some long term confidence to these producers."
He suggested that a big challenge for the sector over the coming years is continuity of supply to domestic and international market outlets. "The breeding flock has been declining by 0.7%/year for the past 10 years*; and whilst the number of breeding ewes only fell by 0.1% between 2010-2011, the high cull and lamb prices could see breeding stock numbers drop again over the coming 12 months if farmers take the short-term option of capitalising on the buoyant meat price"
Going forward Mr Hay said that farmers should be looking at addressing long-term factors affecting their businesses ahead of the CAP reform such as people skills and careful management if the cost base. "ensuring you have a supply of labour with the right skills is an ever increasing challenge for the industry, but one which is foremost in the mind when deciding to increase flock numbers or make a long term investment"
Against this backdrop Mr Hay recommends that farmers attending Scotsheep with investment in mind should focus on any expenditure that will improve the efficiency of the farm’s current labour utilisation and feeding practices, but with a view to optimising profit, not just turnover. “All businesses are different and each farmer should look at their own performance to see if and where investment would be best employed for the greatest returns.”
He adds that “the demonstration of new ideas and innovations at the event, at somewhere as fascinating as Dumfries House, makes Scotsheep unique and immensely valuable to producers. The event also highlights the extent of the opportunities in the sector across all breeds and systems, bringing all the good practices in the industry together on a single site on one day.”
The Bank of Scotland is the main sponsor of the event and has a team of 13 specialist and farming-experienced managers located throughout Scotland. They provide a personalised banking service to farmers and rural businesses in Scotland. Working alongside them is a team of relationship managers based in Edinburgh who can also assist with farming customers’ day-to-day banking needs.
Cotswold farmer and TV presenter Adam Henson who is the Bank's farming ambassador, will be on the Bank of Scotland stand for most of the day during the event.
* Statistics taken from Scottish Executive 2011 Agricultural Census.
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