In the second part of this Farmers Journal series, we look at the cost of keeping a sheep in Scotland.
We will look at a Less Favoured Area hill flock with mainly Cheviot or Blackface ewes and a low ground Mule cross flock of sheep.
Scotland has a lot of sheep with around 2.5 million breeding ewes, of which 90% are based in the Less Favoured Areas (LFA).
Based on the agricultural census, LFA flocks produce 1.28 lambs per ewe while non-LFA flocks produce 1.54.
Over the last 10 years, there has been a steady decline in ewe numbers, with 100,000 fewer in 2020 compared to 2010. The focus of the decline has been a reduced number of hill sheep, particularly in the northwest of Scotland.
Meanwhile, lamb numbers have not matched the decline, with output of around 3.3m lambs annually. In the last 10 years, lamb numbers have fluctuated between a low of 3.1m after heavy snow at lambing in 2013 and 3.4m in the good year of 2017.
The number of lambs scanned per 100 ewes is 107 but lambing outdoors in tough hill conditions means that only 90 lambs are reared
The hill flock in our example is based on costings from the Farm Profit Programme, Quality Meat Scotland and research from SRUC and operates in some of Scotland’s most disadvantaged ground. The number of lambs scanned per 100 ewes is 107 but lambing outdoors in tough hill conditions means that only 90 lambs are reared.
Hoggs will be wintered off farm before being bred as gimmers
The replacement rate for ewes in the flock is 25%, which doesn’t leave many lambs for sale annually.
Hoggs will be wintered off farm before being bred as gimmers. The farm will use one tup for every 33 ewes.
Typically, the mortality rate of ewes is around 10% with a further 15% sold as draft ewes after four crops. Ewes would typically weigh 60kg during pregnancy and be given 300g of concentrates in the last month.
However, in snowy winters more feed such as silage or hay is needed for the sheep to survive.
Output per hill ewe
From a rearing rate of 90 lambs per 100 ewes, 25 lambs will need to be retained as replacements. This leaves 65 lambs to be sold at the market. These lambs will all be sold store at 30kg for an all average price of £55/head.
There will also be 15 draft ewes sold per 100 ewes with each making £65/head. Plus each ewe will yield 1.6kg of fleece a year at 40p/kg making 64p/ewe. This gives an output per ewe of £46.14.
Cost of a hill ewe
Feeding the ewes in the run-up to lambing will cost £5/head based on ewe rolls for feeding 60 days at 300g per day. Plus four weeks of feeding 2.8kg of silage per ewe during heavy snow cover at a cost of £17/bale at 450kg costing £3/ewe.
Vet and medicine per ewe is £5/head and commissions, levies, haulage, shearing, scanning and tags is another £5.80/ewe.
There is also a cost for away wintering hoggs of £20/head including haulage which with a 25% replacement rate adds £5/ewe.
Tups are bought for an average of £500, with old tups sold for £80/head giving an annual cost of £3.50/ewe. This gives a total variable cost per ewe before forage of £27.30/ewe and a gross margin of £18.84/ewe.
After sustained high lamb prices this spring, many hill farmers will be hoping for better store prices
The forage is not charged for as it is unimproved and gets no lime or fertiliser. Quality Meat Scotland’s enterprise costings puts a fixed cost charge per ewe at £41.27 which includes labour, power and machinery, rent, deprecation and finance. This means each hill ewe is losing £22.43/ewe.
After sustained high lamb prices this spring, many hill farmers will be hoping for better store prices. If the store lamb price rose £10/head and cull ewes by £5/head, the output per ewe would be up £7.25/ewe.
Farm support from the government will include a coupled payment of £62/head for retained ewe hoggs
Many hill farms run 1,000 ewes plus 30 outwintered suckler cows with one full-time farmer plus paid help at lambing and unpaid family labour at other times.
We can see from our 1,000 ewes example you can expect a gross margin of £18,800 which would barely cover the farmer’s wage let alone other overheads.
Farm support from the government will include a coupled payment of £62/head for retained ewe hoggs.
Many of these hill units can run to 2,000ha, with 1,000 ewes which would trigger a payment of £25,600 at the 2020 rate of £12.80/ha.
There is also likely to be a small area, 10 hectares, of inby ground classified at region one which will get a payment of £2,050 at a rate of £205/ha. Plus a Less Favoured Areas Support Scheme payment of £20,000 and beef calf scheme worth £2,700. This gives a total support payment for the farm of £65,850.
Low ground sheep
Low ground sheep farmers enjoy a higher level of output per ewe but are paid significantly less in support payments. Typically a rearing percentage of 160% will be achieved from a Mule cross ewe put to a terminal sire tup. In this example, there are 600 ewes on a 120ha farm with 80ha used for grazing sheep, with 40ha for silage and rented out for grazing cattle.
There will also be a wool payment of £1.08/ewe
For every 100 ewes, 140 lambs are sold to the abattoir weighing 45kg at £85/head and 20 sold store at 34kg for £60/head. There will also be 17 cull ewes weighing 80kg which are sold for £85 with each ewe lasting five seasons on average. There will also be a wool payment of £1.08/ewe. This gives a total output of £146.53/ewe.
£83.55/ewe variable costs
Low ground ewes will need better care in the run-up to lambing with an average of 700g of ewe rolls for eight weeks before lambing and four after. There will also be some supplementary silage feeding in the run up to lambing with ewes eating 3kg/day of silage for four weeks.
This gives a feed cost of £15/ewe at £260/t for ewe rolls and £2.80/ewe for silage at £15/bale. Vet costs will be around £7/ewe with commissions, levies, haulage, shearing, scanning and tags another £10.
Tups will likely cost around £700 and last three seasons after serving 40 ewes a year
There will be a replacement rate of 22% with 17 ewes sold cull each year per 100 ewes with five dying on farm. The replacement gimmers will be purchased at £150 in the autumn ready for tupping, adding £33/ewe.
Tups will likely cost around £700 and last three seasons after serving 40 ewes a year. After cull value is deducted, this gives an annual cost of £5/ewe.
Because the farmland has other potential uses the forage grazed by the sheep per year costs £10.75/ewe based on £129/ha of grass costs. This gives a total cost per ewe of £83.55/head and a gross margin excluding fixed costs of £62.98.
Being a low ground farm, the business would not be eligible for LFASS payments or the ewe hogg scheme
The fixed costs for a low ground sheep flock according to the QMS costings come to £47.76/ewe which gives a positive margin of £15.22/ewe.
The support payments for a low ground sheep flock of 600 ewes on 120ha would be £24,600 based on all the land being classed as region one at £205/ha.
Being a low ground farm, the business would not be eligible for LFASS payments or the ewe hogg scheme.
Two Scottish sheep systems
These two examples show the extremes in the Scottish sheep sector from extensive hill systems to intensive low ground flocks.
The hill farms are far more reliant on support payments with the last CAP reform increasing payments.
Low ground sheep farming has a far greater productivity but because they don’t have the same political importance of hill farming they don’t get the same level of support.