Output down as ag-inflation bites

• Producers scale back production

• Farmers blame high input costs

• Focus on productivity not output

Beef and sheep farmers expect to scale back production over the coming months as they strive to remain profitable in the face of high input costs.

Some 40% of cattle keepers suggest they will be reducing numbers during 2023, according to an NFU livestock intentions survey, with 37% saying their numbers will remain the same and only 17% planning an increase.

The survey of 1011 livestock producers was carried out last September, although the results were only made available last month. Responses from all regions of England and Wales covered a range of beef and sheep production systems.

Beef producers

Reasons given to reduce beef numbers were largely predictable. Some 87% of respondents cited high input costs. This was followed by profitability concerns (72%), loss of the basic payment (51%) and lack of market confidence (43%)..

Other reasons included insufficient or unclear information about the government’s new Environmental Land Management (ELM) scheme (42%), government regulartion (41%) and the impact of last summer’s drought (29%).

Almost one third of producers said they expected the number of days to finish cattle would increase during 2023. Some 60% of producers said carcass weights would remain broadly the same, with 24% predicting lower carcass weights.

Market signals are driving producers to reduce weights below 400kgs because of processing efficiency and customer requirements on cut and pack size. Finishing cattle at optimum weights also makes commercial sense when feed costs are high.

Sheep producers

Some 36% of sheep producers suggest they will reduce numbers during 2023, with 41% expecting numbers to remain the same. Only 17% intend to increase numbers with 6% saying they didn’t know if numbers will go up or down.

Similar to beef farmers, reasons given to reduce sheep numbers included high inoput costs (76%), profitability concerns (59%), loss of the BPS (39%), lack of market confidence (44%) and lack of information about ELMs (32%) and weather (33%).

In terms of feed, 88% of beef and sheep farmers said they made forage in 2022, with 17% saying the quality of conserved forage was worse than usual. That said, 33% said the quality was better, with 44% saying it was about the same.

NFU livestock board chairman Richard Findlay said 2022 had been dominated by an unprecedented increase in production costs, combined with one of the driest summers on record.

“We have seen critical farm inputs of fertiliser, feed and fuel rise to unsustainable levels,” said Mr Findlay. There was an urgent need for policies that would help to drive productivity in 2023 and beyond, he added.

“We are focusing more on productivity and with the right support we can invest in our businesses, embrace technology and use data to inform decisions. We need support from our domestic customers and to grow exports.”