Results of a profitability survey of cattle and sheep businesses last year were revealed last week.
Quality Meat Scotland (QMS) says the research by SAC Consulting, part of Scotland’s Rural College, shows margins in most cattle and sheep businesses improved during 2013 despite the poor spring and the wet weather of 2012.
QMS’ head of economics services, Stuart Ashworth said: “The very challenging weather of spring 2013 impacted heavily on mortality during hill sheep and suckler herds’ lambing and calving and resulted in considerable feed and forage expense for all herds and flocks.”
The legacy of 2012’s weather conditions also resulted in additional veterinary costs for some during 2013.
Mr Ashworth continued: “However, market prices did increase substantially during 2013. Furthermore, the improved weather conditions of the second half of 2013 also meant that animals thrived better than in 2012 and tended to be sold at higher weights. Consequently most businesses saw an improvement in margins.”
But locally 2014 is looking to be a very different beast, according to Steven Wilson, managing director of auctioneers John Swan Ltd which has markets at St Boswells and Wooler.
He told us: “Beef cattle prices suffered a significant reduction during the spring and summer of this year making profitability very difficult if not, in some cases, impossible.
“Things have gradually improved since then but with store cattle prices continuing to be very high, beef cattle finishers are under pressure to obtain a margin.
“Prime lamb prices have had a difficult trading period from August until the end of October this year, but thankfully this has improved during this month - yesterday (last Monday) prime lambs at St Boswells averaged £ 1.78 per Kg.
“This is obviously a welcome improvement with many farmers holding a large number of lambs to feed and sell between the months of January and April of next year.”
He added: “Store lamb prices similar to store cattle have seen a very good trade during the autumn which demonstrates confidence for the coming months in the prime ring.”
According to the national 2013 research, suckler herd keepers had a tough time, with just a third reporting a positive net margin - but that was up over 20 percent on the previous year. Among store cattle finishers 72 percent of businesses surveyed achieved a positive net margin, up from 59 percent the previous year. But those finishing long keep store cattle saw a decline in margins.
Among hill sheep, 2013’s spring knocked hill ewe profits, with only 10% of hill flocks returning a positive margin, down from 19% in 2012 and 57% in 2011. Forty five percent of upland flocks recorded a positive net margin, unchanged from the previous year, while 83% of those surveyed running lowground flocks recorded a positive margin, again, unchanged from the previous year. Just over three quarters of the store lamb finishers achieved a positive net margin compared to 50% the previous year.