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Taking Your Lambing Business to The Next Chapter?




Is your business ready for the next chapter?

Is your business ready for the next chapter? | Mole Valley Farmers

 

By the time you read this lambing will be well under way.

Or just about finished in the lowland and about to get going higher up the hill. Having a reflective look at the current state of the sheep sector and its future prospects will not be uppermost in most shepherds' minds.


However it’s worth just taking a quick stock of recent events following the referendum result last June, the result of which gave rise to a devaluation of sterling of around


15-20%, making UK exports more attractive. Finished lamb values tracked above recent levels throughout the autumn, but surprisingly this did not result in an increase in lamb slaughtering and therefore did not make large enough inroads into last spring’s increased lamb crop. The resulting hog trade since the turn of the year has been disappointing. Many finishers having paid a good price for store lambs, are unable to make a decent margin without taking them to heavier weights. How many hogs are still out there is anybody’s guess, but suffice to say it will be enough to take the shine off early suck lamb sales.


Despite a plentiful supply of UK lamb, the major retailers still relentlessly import New Zealand around the same date each year and seem wedded to a strategy of six months’ supply from each country. As this is unlikely to change in the near future, I guess we should bear that in mind and tailor our enterprises accordingly, if we are to rely on the UK domestic market.


Looking ahead, in the short term ewes are in reasonable condition, having had a pretty good autumn and a kinder winter than anticipated. Most scanners report ewes carrying an average crop of lambs, with only early lambers in drier eastern regions that suffered from lack of grass last summer, reporting lower than expected percentages. With a decent lamb crop and a fair wind, we can expect similar financial performance from our flocks. This assumes Dutch and French voters do not deliver the threat of further political instability in Europe at their respective presidential elections and the Greeks keep their heads above water and continue to avoid further financial instability to the euro. In these times of change it would be a brave man to bet against any one of those three potentially earth shattering events happening.


Meanwhile as we start the two years of negotiations to leave the EU, I think history will show these two years to be reasonably stable ones for sheep enterprises. The deal that emerges, which obviously we have no idea about at present, could lead to a huge change to the sheep sector. The range of prospects and possible outcomes are as varied as the number of pundits you speak to, but it is fair to say there are more negative than positive outlooks for the industry in its current form. One plus note is we have time to get businesses in a better place and therefore healthy enough to face the challenges ahead. At first glance it would seem a lower input model carries the least amount of risk and presents the greatest opportunities for future prosperity for sheep post EU.


One thing we can be sure of is that post Brexit British agriculture will be very different to what we have been used to. There will be both challenges and opportunities. Businesses that are in a good position and can adapt, will ride the lumps and bumps and be in a position to maximise any new opportunities that come along.

 



Source Details

 Peter Delbridge, Sheep Farmer and MVF Director



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