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Saturday, 30 May 2015

Sheep farmers feel strain of farm gate price crash

SHEEP farmers are feeling the squeeze after a crash in the farm gate price of lamb on top of soaring feed costs.

Farmer Richard Dodd has warned of a “perfect storm“ for farmers of rising costs and wet weather.

The NFU this week pledged to step up pressure to narrow the gulf between prices paid to farmers and the prices seen by consumers on supermarket shelves.

While farm gate prices have dropped by nearly a quarter, and wholesale prices for UK lamb are down 17 per cent, prices in the shops for UK products have only fallen by two per cent in the same time period.

And the issue isn’t confined to UK lamb.

Figures show the wholesale price of New Zealand lamb has dropped 23 per cent (year on year) and yet the retail price for consumers has only come down 12 per cent in the same period.

With latest figures for November showing the highest level of imports since 2006, the NFU will, this week, be meeting officials from Beef and Lamb New Zealand, the largest sheep meat importing country to the UK, to discuss global market conditions and understand the issues for New Zealand farmers.

NFU livestock board chairman Charles Sercombe believes the farm gate price for UK lamb is not viable in a period where sheep farmers have seen their costs rising.

And he is concerned that the price of UK products on the shelves hasn’t fallen by anywhere near the same amount as the farm gate price.

“Many of our sheep farmers, particularly those in the uplands, have been experiencing a major downturn in lamb prices which I fear will drive confidence out of the industry,” said Mr Sercombe.

“I understand their frustrations at a time when they’re also dealing with rising input costs and poor weather.

“Consumers also want to see competitively-priced UK products on the supermarket shelves, but the present situation is not sustainable.

“We have recently written to all major retailers urging them to show long-term commitment to our livestock producers to ensure we have a sustainable supply of UK lamb, for the benefit of both farmers and consumers.

“Currently, farmers are suffering, and consumers aren’t benefiting, so just who is reaping the rewards of the ‘great lamb robbery’?”

Ogle farmer Richard Dodd has warned that a “perfect storm” could be brewing if farmers’ costs – particularly for feed – continue to rise and there is no let-up in the wet weather.

He said this week’s rapid thaw would only add to flooding problems, in turn damaging winter crops and pushing up feed prices.

“I wouldn’t call it the perfect storm just yet, but if this continues feed crops will disappear quickly.

“Most crops are usually sown in late winter and some stand up very well, but things like winter barley that doesn’t like getting its feet wet, will just perish.

“The problem is, if no-one has got good crops, people will be desperate to hang on to what they’ve got.”