Plan Early Lambing with Good Budgeting in Advance

Plan Early Lambing with Good Budgeting in Advance
06/07/06

Breakeven budgets produced by the English Beef and Lamb Executive (EBLEX) suggest early lamb production could generate profitable returns over the coming season.

© photo courtesy jennifermackenzie.co.uk

However, given the challenging nature of the spring market and the extent to which profitability depends upon fixed as well as variable cost control, it strongly advises producers to base early lambing decisions on their own breakeven budgets before putting ewes to the tup this summer.

Based on the average EBLEX costed flock performance in 2004/5 with lambing in January/February and finishing on a grass/concentrate diet from April to June, the budgets suggest realistic total costs of just under £50/lamb or £2.71/kg deadweight for 2007 (Table).

This compares with four year average deadweight prices of £3.28/kg in April falling to £2.89 in June, suggesting there could be reasonable margins available for many of those selling the majority of their lambs in April and May.

At the same time, though, the budgets underline that total costs would only have to be around £10/lamb or 60p/kg deadweight higher to make production unprofitable even if all the lambs were to be sold at historically higher April prices.

With sheepmeat volumes forecast to decline in 2007, English producers could certainly be seeing better prospects for early lamb profitability this season providing they maintain good control over costs; always supposing increased competition does not materialise from chilled lamb imports or there is no extra carryover of old season lamb.

Under these circumstances, good breakeven budgeting using the EBLEX model with realistic assumptions on feed and labour costs, in particular, will help individual units assess the level of risk they run from early lamb production and plan accordingly ahead of tupping.

EBLEX 2007 Breakeven Budgets for Early Lambing *

Variable Costs	£/ewe	Fixed Costs	£/ewe
Ewe concentrates (50 kg/ewe)	6.75	Paid labour	12.00
Lamb concentrates (80 kg/ewe)	11.60	Power & machinery	7.00
Forage	4.00	Admin	4.00
Other feeds	2.00	Property charges	3.00
Bedding	1.00	Land resource costs	7.00
Vet & med	5.00	Machinery & fixtures	5.00
Other	3.00	Finance costs	3.00
Total cost per ewe	33.35	Total cost per ewe	41.00

Cost per lamb (1.5 lambs/ewe)	22.23	Cost per lamb (1.5 lambs/ewe)	27.33
Cost per kg deadweight (18 kg/lamb)	1.21	Cost per kg deadweight (18 kg/lamb)	1.49
Breakeven price per lamb to cover total variable and fixed costs			49.57
Breakeven lamb price per kg to cover total variable and fixed costs			2.71

* Based on average 2004/5 costed flock performance on grass/concentrates adjusted for 2007 costs.

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