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.
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.
Gene Markers Boost Performance
Boost
Returns with Better Planned Ewe Replacements
Lake District Sheep Release
Baarmy World Cup Song
Speed
Dating For Beef Export Deals
|