Finishing store lambs from organic hill and upland farms OF0119

Summary

1. The aim of this study was to assess the economics and constraints associated with home finishing lambs on a range of organic hill and upland farms in England and Wales, and to evaluate the potential for further finishing on registered farms in the lowlands.
2. The current state of the organic sheep sector is briefly reviewed. This identifies problems of scale, limited premia and uneveness of supply as limiting factors to more rapid development of the market and associated production systems.
3. To quanitfy the effect of organic management on financial performance, hill and upland farms were classified under four typical systems, depending on the degree of intensification.
4. Without a sizeable area of improved ground, to which fertiliser and other inputs could have been applied conventionally, flocks based on high hill or marginal hill systems were least affected by switching to organic management. Flock Gross Margin on the marginal hill declined by approximately 7%.
5. On more intensive farms, typified by Welsh hill or upland farming systems, there is greater potential to finish lambs at higher stocking rates under conventional management, and the consequences of changing to organic management are greatly increased. Assuming a 10% premium for fnished organic lambs, deviating from convetional practice to produce store lambs or finish lambs at higher production cost, reduced flock Gross Margin by approximately 12-15%. Without a premium, this deficit increased to 15-20%.
6. The Organic Aid Scheme can make good the likely income loss during the first two years after conversion, when the highest rates are payable. However, in the long-term organic flocks must compete solely on the basis os a premium paid for finished, and ideally, for store lambs.
7. Physical and financial constraints were identified as t wy systems had not developed linking potential production of store lambs in the hills/uplands with finishing on organic farms in the lowlands. These were mainly scale and infrastructure, availability of suitable feeds and the likely level of return to the lowland farmer from a store lamb finishing enterprise. Potential sources of feed for finishing organic lambs were assessed. These include permanent pasture, short-term leys, catch crops, grazed set-aside land and conserved fodder.
8. Integration with existing organic systems of all types was estimated to have the potential to finish an extra 10-15,000 lambs per annum, equivalent to the number of lambs currently receiving an organic premium.
9. Further opportunities to expand finishing capacity on lowland farms were examined. Mixed organic farms are likely to have little or no capacity to finish bought in store lambs, except where overall stocking rates are constrained by insufficient ewe/suckler cow quota, or where catch crops are added to the rotation.
10. The addition of a store lamb enterprise to lowland systems was calculated to increase farm Gross MArgin by 2-3%, depending on the type of farm (dairy, stockless arable, or mixed). This represented a marginal return on capital invested in a store lamb finishing enterprise of 9-24%.
1. The financial risks involved, the availability of suitable labour and fixed equipment, and reluctance to vary arable rotations, make store lamb finishing enterprises less attractive to the lowland farmer.
12. Beyond the capacity to increase the number of certified lambs currently offered by up to 50%, greater opportunities are only likely to develop, when there is a significant increase in land (particularly on arable farms) entering conversion.