The majority of Scotland’s beef and sheep farmers experienced improved margins last year despite a washout spring, according to Quality Meat Scotland (QMS).
The red meat levy body said producers would have struggled to withstand higher costs and livestock mortality had the market prices for all stock not been so high.
The organisation launched the Cattle and Sheep Enterprise Profitability in Scotland 2014 report, which outlined results of a survey of beef and sheep producers during the 2013 calf and lamb crop year.
“The very challenging weather of spring 2013 impacted heavily on mortality during hill sheep and suckler herds’ lambing and calving and resulted in considerable feed and forage expense for all herds and flocks,” said QMS head of economics services, Stuart Ashworth.
“However, market prices for all classes of stock covered by the survey did increase substantially during 2013. Furthermore, the improved weather conditions of the second half of 2013 also meant that animals thrived better than in 2012 and tended to be sold at higher weights. Consequently, most businesses saw an improvement in margins.”
According to the report, only one third of suckler herd producers made enough money to pay family labour – this was up from 22% last year.
The average gross margin per cow in a Less Favoured Area (LFA) hill suckler herd was £289, with the top third achieving £399 and a profit of £22 compared to an average loss of £96 a cow.
Non-LFA suckler herds reported an average gross margin of £336 a cow, with the top third achieving £503 – 37% of these herds posted a profit.
The proportion of cattle store finishers achieving a profit increased to 72%, from 59% last year, however those finishing long keep store cattle saw a decline in margins in 2013.
The average gross margin per cow for a rearer finisher business was £501 with a loss of £66 – 37% of all rearer finishers achieved a profit.
Poor weather in early 2013 resulted in a decline in hill ewe margins with only 10% of hill sheep flocks posting a profit, compared to 19% last year and 57% two years ago.
The number of upland and lowland sheep producers turning a profit remained unchanged at 45% and 83% respectively.
The report found that just over three quarters of store lamb producers turned a profit, compared to 50% last year. The average gross margin per ewe on an LFA hill sheep enterprise was down £10 to £16 a piece.