Sheep farmers face big losses

ENGLISH sheep producers are experiencing their biggest losses since 2006 at £26 per animal.

The latest figures, from Eblex, are an update on those recently released by the NFU and show that producers are losing an average of £26 for every lamb sold deadweight, due to a combination of low prices and rising costs.

Costs of production have spiralled from an average of £68 per lamb in 2007 to an estimated £91 per animal today – an increase of 34 per cent – while the deadweight lamb price has fallen by 25 per cent since January last year.

John Cross, Eblex chairman, said: “The industry is experiencing a perfect storm of depressed farmgate prices and increasing costs, creating the worst trading conditions the industry has known for over half a decade.”

He said a number of factors were contributing to the situation including some decline in demand, particularly in Europe, which had caused a weakening in worldwide lamb prices.

“However, of far greater concern is the effect of a significant increase in the quantity of low-priced New Zealand lamb imports arriving in the UK,” said Mr Cross.

“If we continue seeing large quantities of cheap imported product on the shelves, the lamb market is unlikely to recover in the way we would usually expect it to.

“It is essential that we operate in a free worldwide market, however, everyone must bear in mind their wider responsibility to nurture a more stable trading environment in order to create a sustainable global lamb supply chain.”

The NFU said producers were concerned about the gulf between the price they were receiving and the price on the supermarket shelves.

While farmgate prices had fallen by a quarter, and wholesale prices for UK legs of lamb were down 17 per cent, UK products in shops had only fallen two per cent.

Even the wholesale price of New Zealand lamb had dropped 23 per cent year on year, yet its retail price was only down 12 per cent in the same period.

Charles Sercombe, NFU livestock board chairman, said the farmgate price for UK lamb was not viable at a time when producers are experiencing rising costs.

He said: “Many of our sheep farmers, particularly those in the uplands, have been experiencing a major downturn in lamb prices which I fear will drive confidence out of the industry. I understand their frustrations at a time when they are also dealing with rising input costs and poor weather.”

Consumers also want to see a competitively priced UK product on supermarket shelves, but the present situation was not sustainable.

Mr Sercombe said: “We have recently written to all major retailers urging them to show long-term commitment to our livestock producers to ensure we have a sustainable supply of UK lamb, for the benefit of both farmers and consumers.

“Currently farmers are suffering, and consumers aren’t benefitting, so just who is reaping the rewards of the ‘Great Lamb Robbery’?”

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