Farm Profit Programme: concentrating on the average, not the top 20%
Lambing season is in full swing on most of the focus farms – albeit slightly later than previous years. Declan Marren writes.

Four of the six focus farms have sheep enterprises and since the beginning of the programme, each farm has altered its lambing date slightly.

There are a few reasons for this, but it all comes back to one common aim – to sell more lambs every year.

Lambing occurs in spring. However, depending on where you are in the country, spring can start anytime from mid-February to mid-May.

Matching your lambing date with the typical onset of grass growth will have a massive impact on both the number of lambs you produce and the overall cost of production.

Ewes and lambs at Biffens at Arnage.

The changes in lambing date on the focus farms have been relatively small – a fortnight in most cases – with one farm moving lambing back a whole month. Initially, some of the farms were somewhat reluctant to delay lambing.

Some were aiming for the high lamb price often seen in early to mid-June, while all felt that delaying lambing would choke up the back end of the year with lambs still in the system competing for grass with ewes at breeding time. However, what we are finding is the exact opposite.

Feed costs

If there is not sufficient grass available at lambing time, it leads to increased feed costs.

Each year, we benchmark the focus farms for each enterprise. The majority of purchased feed going into these systems occurs pre- and post-lambing.

By better matching lambing date to grass growth, we have seen purchased feed/ewe decrease from almost £25/ewe to £16.60/ewe last year – a saving of over £8/ewe.

High lamb price

The general trend with lamb price in Scotland sees it peak at some stage in May/early June and steadily decrease throughout July, August and September as greater numbers of lambs come to the point of slaughter.

Chasing this high-priced lamb in early June is fine if you are in an area suited to lambing in mid- to late-February. For the majority of the focus farms, this is not a viable option.

The Biffens lamb everything outdoors.

Aiming your entire system for a high price point in the market (which may or may not be there) that only 20% of your lambs will be fit for drafting for does not make sense.

If grass is not growing, it also means the weather conditions are not favourable for newborn lambs.

This leads to higher losses at lambing time of both lambs and ewes due to nutritional stresses, as well as more instances of mastitis leading to increased culling rates in the flock.

Clogging up the system

Despite fears of having more lambs in the back end of the year due to a delayed lambing date, what the focus farms are seeing is more lambs being sold off grass alone each year.

This is partly due to the later lambing date, as well as more planned grazing rotations, as ewes have sufficient grass under their heads to increase milk yield and drive growth rates in lambs.

Lambing early can cause a reduction in growth in lambs and increase days to slaughter if nutrition supplementation is not sufficient.

There are 200 days from mid-April until 1 November. Therefore, there is little excuse for any lamb born in mid-April to still be on farm by this date, barring a hill system.

Anything that is will have had an average liveweight gain of less than 210g/day. If the same lamb is still on farm at the turn of the year, it will have had a liveweight gain of less than 170g/day.

The target for the focus farms is to achieve a 30kg weaning weight (21kg for hill flocks) at 12 weeks of age – ie, an average liveweight gain from birth to weaning of over 290g/day.

Lambing date example

Table 1 outlines three farm scenarios – the first farmer is lambing in mid-February about three weeks before the typical onset of grass growth for their farm. The second farmer lambs down at the onset of grass growth.

Each farmer puts 100 ewes to the tup, and scans at 190%. Therefore the potential of both flocks is the same at the point of scanning.

However, farmer one has a higher replacement cost due to a higher loss of ewes in late pregnancy and more instances of mastitis with an earlier lambing date.

Cull values and replacement ewe cost are the same for each, at £80 and £140 respectively.

Due to lambing in more favourable conditions, farmer two has a higher weaning percentage, increasing from 130% to 160%.

Farmer one is drafting 20% of lambs in early June receiving £110/hd, while the remaining 80% of lambs sell for £85/hd, giving an overall average sale price of £91/hd.

This leaves the gross margin (GM) at £54/ewe in this system.

Farmer two has been calculated back the way to achieve the same GM as farmer one of £54/ewe.

However, due to having more lambs to sell and lower input costs due to making better use of grass, Farmer two can afford to take an average lamb price of just £63/lamb – some £28/lamb less than farmer one.

Farmer three’s performance mirrors that of farmer two.

However, it shows the potential GM/ewe with an average sale price of £80/lamb – similar to the average price received by the focus farmers last year. This sees GM increase by £28 to £82/ewe.

Lambing on the focus farms is progressing nicely this year. The weather, while being changeable, has been much better than last spring, and the kinder winter sees ewes in much better condition in the run-up to lambing.

There is much more grass around this lambing time and managing ewe body condition has been difficult on some farms as ewes are extremely fit.

Concentrate supplementation levels have been reduced accordingly.

Those lambing indoors have managed to hold up ewes and lambs for 24 to 48 hours when necessary, getting stock out as weather conditons allowed.

The focus now is getting ewes and lambs on to a good grazing rotation to maximise lamb growth. All four farms will rotationally graze ewes and lambs this year, with many farms increasing the number of paddocks per group from four to six to give them more flexibility during periods of high grass growth.

Grazing ground was fertilised on most farms in early- to mid-March and the farmers are now getting stock onto the rotation in sufficient time as to not let paddocks at the end of the rotation get out of control.

Price cuts and oversupply hit milk sector
Graham’s The Family Dairy was with a 10% increase in milk supply; and First Milk cut price paid in June.

Falling prices and increased volumes are challenging the dairy sector. First Milk has cut its price to producers due to “downward pressure on dairy markets”, and UK production has been hitting a 20-year high every month this year. Meanwhile, Graham’s The Family Dairy has struggled to cope.

“Our milk production was up by 10% this year, compared with last year. This is a real challenge for us as an independent family dairy business, as milk volumes must be in line with our customers’ needs,” said Robert Graham, managing director.

“We are having positive conversations with our dairy partners and colleagues to address these ongoing challenges, working together on the best way to understand what the milk supply needs to be, and deliver on it.”

As processing capacity is outstripped by supply, excess milk will be put on the market, having a downward effect on prices. Average UK price is 29p/l, slightly above the five-year average of 27.5p/l.

The UK milk future projections are also indicating an encouraging upward trend

First Milk has announced that its price will reduce by 0.3p/l from 1 June to 27.45p/l for liquid milk and 28.37p/l for manufacturing milk.

Jim Baird, First Milk vice-chair and farmer director, said: “Unfortunately, we now need to make this adjustment in light of the downward pressure on UK dairy markets. Looking forward, global dairy markets are looking more positive and, with peak largely behind us, the UK milk future projections are also indicating an encouraging upward trend.”

Market for dairy calves

Finding a market for male dairy calves was the subject of conversation at the Exiles dairy discussion group meeting in Dumfries last Tuesday.

Up until now, the only real market for these low beef-merit Holstein Friesian and Jersey-cross calves was for pet food production

The discussion group – primarily made up of spring-calving, grass-based dairy farmers in southwest Scotland and northwest England, are trying to find alternatives to slaughter for male dairy-bred calves.

Up until now, the only real market for these low beef-merit Holstein Friesian and Jersey-cross calves was for pet food production. But milk buyers, responding to concerns from the public, are beginning to enforce rules around minimum age for slaughter.

The dairy farmers say that finding an alternative market for these calves is difficult and that an industry-wide initiative needs to be put in place to reduce the number of low beef-merit calves, but also to find a market for beef calves from the dairy herd.

One farmer said it cost him £12/head to transport three-week-old Hereford-cross calves from his dairy herd near Dumfries to a market at Carlisle, only for the calves to make an average of £28 in the ring – below the cost of feed and transport.

Scottish beef and lamb markets experience a dip in price
Farmers Journal Scotland editor John Sleigh has his take on the week's lamb and beef sectors.

Cattle prices slipped a little this week as abattoirs took advantage of decent supply, with prices paid closer to £3.60/kg compared with £3.65/kg last week for an R4L steer.

The official AHDB reported price dropped 1p/kg to £3.67/kg for an R4L steer.

This maintained a premium over the northern English price of 9p/kg for the same grade cattle.

Heifers are reported by the AHDB as a good trade at £3.70/kg for an R4L.

Deadweight cow prices rose 5p/kg to £2.73/kg for an O-4L carcase, which is 8p/kg more than northern England.

Lamb market

The live market for lambs tumbled by 19p/kg to £1.88/kg for medium-weight lambs.

Heavier lambs also fell by 18p/kg to £1.76/kg live weight.

Numbers of old-season lambs sold through the live ring fell back again as the season is drawing to a close, with 1,300 fewer lambs sold, with 8,941 head through the live ring.

Meanwhile, 5,211 store lambs were sold through Scottish marts, with a big sale at United Auctions.

The AHDB is reporting a UK price of £5.04/kg for an R3L carcase, with a kill of over 16,000, which is up 7,000/head.

Numbers of new-season lambs sold through the live ring rose again by 700 head to 1,565 lambs.

Ayr, Lanark, St Boswells, UA Stirling and Thainstone marts sold over 100 new lambs each.

The average price for medium-weight lambs was £2.28/kg liveweight. Cast ewes through the ring fell nearly 1,000 head on the week to 2,668 head, as the average price dropped £5/head to £63/head.

Beef wobble worry
Farmers Journal Scotland editor John Sleigh has his take on the week's big news.

It’s worrying that a few abattoirs cut their beef price this week to just over £3.60/kg for an R4L steer. It would seem increased beef supply and weak consumption are allowing processors to claw the price back a couple pence.

Retail sales have been struggling, sliding by around 4% on the year

After a sharp fall in supply from mid-March to April, we have seen a recovery in the last three weeks. While our beef kill is unchanged on the year, when you factor in a higher average carcase weight there is 0.6% more volume on the market.

Meanwhile, retail sales have been struggling, sliding by around 4% on the year, with roasts taking a significant hit.

The good news is the current supply peak usually finishes just after the Highland Show, and barbecue season should kick in soon, helping to increase consumer demand.

No cars at future shows

Having no cars at the Highland Show was one of the recommendations by a transport expert to chief executive officer Alan Laidlaw.

Alan found it hard to imagine how thousands of farmers could descend on Ingliston without using motor vehicles.

But future planners are serious about the combustion engine’s demise, and felt that not much parking will be needed for the double centenary year in 2040.

If this comes to bare, then we better widen doors on the trains from Mallaig if we want a Highland cattle class.