Bringing cattle indoors after a summer at grass should be enjoyable. What’s not to like about cattle romping round in their new surroundings, knee-deep in clean, bright straw, or watching them come to the feeding troughs when good-quality silage and grain mix appears?
If only. Much of the straw from this year’s wet harvest is poor stuff and silage quality is generally poor, as is grain quality. There’s also a feeling that no matter how carefully cattle have been studied and monitored while at grass – often with supplementary feeding – some in every batch are not as big or as fit as they would have been if summer had been better.
In short, bringing cattle inside hasn’t been as enjoyable as it should be and there is still a long winter ahead during which straw and feed quality will not improve.
As always, the best beef producers will make a living. The latest costings from Eblex Business Pointers confirm that yet again.
Excluding what they call non-cash costs of unpaid family labour, rental value of owned land and interest on working capital – substantial items for many farmers – the report found that the margin for the top third of cattle finishers was £289 per head.
That seems remarkable to me, when the average margin was a pitiful £36. The average margin for intensive finishers was £118 per head, for the top third £185.
Looking at costs, Eblex found that the top third of suckler herds in the hills and uplands had costs of £46 per cow, while the average was £57.
It’s the old double-whammy for below-average producers of costs too high and returns too low. For the less able among us, that is never an easy gap to close, but the advisers keep hammering away.
Carol Davis, a senior analyst with Eblex, said: “The Business Pointers data clearly shows that strict control of fixed costs gives producers an opportunity to make significant efficiency gains and improve their bottom-line results.
“Fixed costs include a range of inputs such as labour, power and machinery, contractor charges, administration, property charges and land resources.
“By benchmarking their own performance against top-third producers in the report, they can pinpoint areas of high cost and try to reduce them.”
Once again, if only. It’s one thing to know where costs are high, another to try and reduce them. But the top-third results show that it can be done, and the same applies to sheep in the same Eblex costings.
Again, excluding unpaid family labour, rental value of owned land and interest on working capital, the net margin per ewe for top-third lowland breeding flocks was £42.36. The average was £6.68. For hill and upland breeding flocks, top-third margin was £42.14, average £14.14; for top-third store lamb finishers the margin was £24.45 per head, average £8.80.
As Robert Townsend wrote many years ago in Up The Organisation – still well worth reading for anyone running a business – “If you aren’t in business for fun or profit, what the hell are you doing there?”
Looking at the above averages, elementary maths tells us that about one third of producers have margins below those shown. There’s no profit there and, unless I miss my guess, precious little fun. Not much joy for sheep farmers in the latest statements from the British Wool Marketing Board either.
After the good news last year that the average wool price was a 25-year high average of 124p per kilo, this year it is about 80p.
That’s a dramatic slump and wool board chairman Malcolm Corbett admitted that perhaps they had been too optimistic.
A fall in demand from China, the Eurozone crisis, European countries deep in debt and renewed competition from New Zealand had all contributed.
Whatever the causes, the net result for sheep farmers is disappointing. As is the way, lamb prices have fallen by about eight per cent in the past month. That is substantially below last year at this time and even less than 2010.
A main reason has been poorer carcase quality because of the cold, wet summer, while the strength of sterling has made exports less competitive, and the value of sheepskins has fallen.
Anyone getting glimpses of the crowds at last weekend’s rugby internationals featuring Scotland and England might wonder how that could be, although I suppose, apart from football commentator John Motson, sheepskin coats don’t feature much anywhere else.
In Borders fields the last stages of an awful harvest continue to limp along with beans still to cut – or in some cases plough in – and there is still straw to bale if and when there is ever a drying, as opposed to bright and sunny, day. Desperate attempts at autumn sowing continue and will for some weeks.
Some growing crops are looking good, many are patchy because of poor seedbeds and slug and disease damage, and water continues to lie in places I’ve never seen it before.
As a US politician said recently when asked if she was an optimist or a pessimist: “I’m an optimist who worries a lot”.
Most farmers would, at present, fall into that category.