Fuel increase adds costs for farmers

Rocketing fuel prices are causing problems for beef and sheep farmers, according to the latest figures from Eblex.

A 20% increase in fuel prices has led to a year-on-year rise in the cost of meat production according to statistics in Eblex’s 2010 Business Pointers report, due out in October.

Headline figures for the year to 31 March 2010 show that power and machinery costs are up between 2p and 3p per kilogram (kg) of liveweight produced across every type of beef and sheep enterprise.

“This rise in input costs, coupled with the current drop in beef prices in particular, raises serious concerns about the sustainability of the industry,” said Eblex chairman John Cross.

“The figures demonstrate that the steep rise in the cost of fuel has already had a significant impact on both farmers and contractors.

“Over recent months fuel prices have continued to escalate, so we would expect year-to-date figures to show a further increase in power and machinery costs.”

The average cost per kg liveweight of producing a weaned calf now stands at £2.73 for lowland suckler herds and £2.99 for suckler herds in less favoured areas (LFAs). Sheep producers have also seen their costs rise to £2.03/ kg liveweight of lamb produced for lowland breeding flocks and £1.95 for LFA breeding flocks.

The high price of buying in stock has led to further cost increases for both intensive and extensive cattle-finishing enterprises, with finishers investing, respectively, a total of £2.81/kg and £4.17/kg liveweight of beef produced. The cost to store lamb enterprises is now an average £1.55/kg liveweight of lamb produced.

The full Business Pointers for 2010 will be launched at the Eblex annual conference, on 21 October.