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UK Farmers' Costs up 36 Per Cent in a Year

01 September 2008

UK - Farmers in Britain have seen a massive leap in their operating costs in the past year, according to the latest Agricultural Inflation Index published by purchasing group Anglia Farmers Ltd. According to a Livestock and Meat Commission (LMC) bulletin, the report shows that overall costs on a mixed arable and livestock farm have risen by 35.5 per cent since September 2007.

Anglia Farmers published figures in April for the first six months, which showed an overall agricultural inflation rate of 16.7 per cent, and the rate of increase has continued to rise in the second half of the year (ending August 2008).

Results for individual farm sectors show that an enterprise growing cereals and oilseed rape has seen inflation rise by 37.2 per cent in the past year, potato growers 37.9 per cent, sugar beet growers 35.6 per cent, dairy farms 35.4 per cent, and beef and lamb producers 34.3 per cent.

For livestock farmers, feed costs have risen by 44 per cent, soaking up any gains made recently in the market for milk, beef or lamb. The index reveals that fertiliser, which has risen by 156 per cent, forms half of the total cost increase. Machinery costs have also seen dramatic rises. The cost of new machinery, other than tractors, rose between 15 per cent and 20 per cent depending on whether it was imported or not.

The Northern Ireland Red Meat Industry Task force is continually updating the production models which it published last October. The most recent calculation, only taking into account a 100 per cent increase in fertiliser costs and 50 per cent increase in feed and fuel costs, reveals that the full cost of producing suckler beef to slaughter is now £4.00 per kg carcase weight (for the most efficient producers with inputs maintained at previous levels. As the highest price paid so far this year was £2.70/kg cw (average U3 and R3 grades) in week ending 28 June, the loss per finished suckler animal sold amounts to £443.This compares to a loss of £483 per animal finished on a grass/silage system in the original Task Force report. This calculation does not take into account all of the cost increases shown in the Anglia Farmers table.

. Inflation within Category (%) Weighted Change (%)
Seed 25.4 1.5
Fertiliser 156.0 17.2
Chemicals 11.4 1.3
Animal Costs 43.9 5.3
Contract & Hire 9.3 0.7
Machinery 22.8 3.4
Fuel 57.7 2.9
Labour 5.3 0.7
Rent, Rates, Finance Etc 14.1 2.5
Total Weighted Inflation - 35.5

UK Prime Cattle Slaughterings Down 6 Per Cent

UK prime cattle slaughterings in July totalled 180,000 head. Reports state that the tight cattle supply is still evident, as prime cattle slaughterings in July were nine per cent lower compared with the corresponding month a year ago. The largest year on year fall was recorded in Scotland; prime cattle throughputs were 13 per cent lower. Slaughterings throughout England and Wales fell by nine per cent on the year while the fall in clean cattle throughputs in Northern Ireland was less marked at six per cent.

In the year to the end of July, UK prime cattle slaughterings were six per cent lower than in the same period last year. Significantly,UK young bull throughputs were 10 per cent, or 18,000 head lower than earlier year levels. In contrast, year to date cull cow and mature bull throughputs of almost 300,000 head were nine per cent higher in January to July 2008 compared with the same period in 2007. Source Anglia Farmers Ltd

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