Hill and Upland Farming in the North of England

M4te1.174; Fi tirgy:CDATION OF AGRICULTURAtcEcoNom ICS SEP

• HILL AND UPLAND FARMING IN THE NORTH OF ENGLAND

S. ROBSON and D. C. JOHNSON

Agricultural Enterprise Studies in England and Wales Economic Report No. 54 MAY 1977 — Price f1-50

UNIVERSITY OF NEWCASTLE UPON TYNE DEPARTMENT OF AGRICULTURAL ECONOMICS HILL AND UPLAND FARMING IN THE NORTH OF ENGLAND.

1973/74 and 1974/75.

A two year review_ of financial and other results for an identical sample of 53 farms in the Hills and Uplands of Northern England, with results 'relating to the main enterprises on the farms. - The review also includes a comparison of certain data for the years 1973/74 to 1975//6. AGRICULTURAL ENTERPRISE STUDIES IN ENGLAND AND WALES.

University Departments of Agricultural Economics in England and Wales have for many years undertaken economic studies of crop and livestock enterprises, receiving financial and techr4cal support for this work from the Ministry of Agriculture, Fisheries and Food.

•The departments in different regions of the country conduct joint studies into those enterprises in which they have a particular interest. This community of interest is recognised by issuing enterprise reports prepared and published by individual departments in a common series entitled "Agricultural Enterprise Studies".

Titles of recent publications in this series and the addresses of the Univprsity Departments are given at the end of this report. ACKNOWLEDGEMENTS.

This report is based on financial and other data made available to the Agricultural Economics Department of the University of Newcastle upon Tyne by farmers who co-operated in the Farm Management Survey. The department takes this opportunity of thanking these _farmers for their willing co-operation and for providing the additional information required for the report.

Grateful acknowledgement is also made to various colleagues wilo assisted in the collection and analysis of the data and to Mr. A.W. Tansey who edited the report. CONTENTS. CHAPTER Page.

Introduction. 1.

11 Physical Data. 4. The Sample. 4. Land Use and Levels of Stocking. 5. Land Use and Stocking Data - Acreage Size Groups. 7.

III Financial Results. 9. Hill Farms and Upland Farms. 9. Hill and Upland Farms - Acreage Size Groups. 11. Dairy & Sheep Farms. 11.

IV Enterprise Results. 13. Beef Breeding Herd. 13. Beef Breeding Herd - Herd Size Groups. 14. Beef Breeding Herd - Comparison of Results 15. for 1968/69-1969/10 and 1973/14-1974/15. Other Beef Cattle. 16. The Sheep Enterprise. 17. The Sheep Enterprise - Flock Size Groups. 21. Dairy Herd and Other Cattle. 22. Comparison of Enterprise Results. 23.

Comparison of Results - 1973/14 to 1975//6. 24.

APPUDIX

Accounting Methods and Definitions. 27.

11 Results for the University of Leeds Sample Farms. 30.

III Direct Government Support to Hill and Upland Farming. 33.

Note: Extended analyses of output, costs of production and other supplementary data relating to the three groups of farms and the main enterprises are published separately. Copies are available on request free .of charge.

Other Publications in this Series. 34.

Addresses of University Departments. 37. CHAPTER I.

INTRODUCTION®

An important part of the Farm Management Survey conducted by the Agricultural Economics Department of the University of Newcastle upon Tyne is the investigation of the profitability of hill and upland farming. Of the total number of farms taking part in the survey about 35 per cent may be classified as hill or upland. At the present time studies relating to the hills and upland are of particular relevance in the context of the European Economic Community's "less favoured areas"®

A previous study carried out in conjunction with the University College of Wales, under an enterprise study programme, covered hill and upland beef and sheep production over the years 1968A9 and 1969/70. Although this study assessed the costs and returns of these enterprises, they were not necessarily determined together on the same farm and this precluded any reconciliation with net income on the farm. A new approach was made in setting up the present study, in that it was conducted within the framework of the Farm Management Survey relating_ to the 1973/14 and 1974/15 years® This procedure has many advantages, perhaps the most important of which is one of containing cost, a separate recruiting programme being unnecessary® The apparent non-randomness of the current sample might give rise to some criticism but, since the Farm Management Survey does contain some degrae of random selection, it is felt that the composition of the sample does not detract from the usefulness of the results. The fact that the separate results for the cattle and sheep, together with assessment of other input and output, could be reconciled with the whole farm trading results was considered a desirable factor outweighing possible disadvantages®

The present study was conducted in conjunction with the Agricultural Economics Department of the University College of Wales, who will report on the results for their region. Initially the North of England was represented by the Agricultural Economics Departments of the Universities of Leeds, Manchester and Newcastle, with the latter acting as co-ordinator® , However, results* for the Yorkshire area were available only for the first year of the study, and Manchester's contribution to the sample.was very small. This report is therefore restricted to the area covered by the University of Newcastle upon Tyne, where there was a better sample distribution. Although the regions (Wales and the North of England) are reported upon separately, a general presentation format was agreed which enables certain comparisons between regions to be made. Co-operators will receive copies of the reports and others may obtain copies from the appropriate department.

See Appendix 11.

1. The North of England may be defined as the counties of Cumbria, Northumberland and Durham. This area contains the northern end of the Pennine moors and hills, the mountains and hills of the Lake District and the southern end of the Cheviot hills. In the region there are about 1,143,000 acres of rough and common grazings which amount to 38 per cent of the total of this type of grazing in England and 40 per cent of the total acreage of this Northern area.

Although the definition of rough and common grazngs is not precise, because a certain amount may be in lowland areas and not all high lying, it can be accepted that the majority is situated in the hill and upland areas of the region.. In this report a distinction between "hill" and "upland" is made using certain criteria.** There is in fact no clearly definable line at which "lowland" becomes ''upland" and "upland" becomes "hill". Altitude alone is not a reliable criterion. In general, lowland describes the area where most crops can be grown and harvested with comparative ease while upland may be taken as the intermediate zone between this area and hill land proper where cropping and intensive livestock production is uneconomic. The proportion of upland to hill land varies in different areas. For example in the Lakeland hills and the western Pennines the upland area is relatively narrow but on the eastern slopes of the Pennines it is wider and more extensive. In some areas there are river valleys with fertile and sheltered bottom land farmed in conjunction with the surrounding moorland,while in other areas the entire farms lie on high plateus with relatively little variation in altitude.

In general, geographical situation, altitude, climatic conditions, soil and natural vegetation dictate the system of farming. Although in lower lying areas dairying may be important, land lying at higher elevations is normally best suited to grazing livestock for store raising. Even where dairying occurs, it is often associated with store cattle production and maintenance of sheep on the surrounding fells and allotments. Beef cattle and sheep are very significant in the agricultural economy of these areas.

In the Northern region there were approximately 1,426,000 breeding ewes in 1974, of which 67 per cent were eligible for hill sheep subsidy. These constitute an important part of the sheep industry, being the primary link in the loeeding chain to the lowlands and providing the lowlands with lambs to fatten.

Of the total breeding cow herd in the North of England in 1974, 45 per cent were classified as beef cows, and of these 57 per cent were eligible for hill cow subsidy. This demonstrates the importance of the hills and uplands in providing store animals for finishing on the more fertile lowlands and a basic source of hardy breeds for crossing.

** See Appendix I.

2. From the total of government support to agriculture, data .for the North of England (as defined previously) are not separately available. However, this region received in 1974 about 23 per cent of the total hill cattle and sheep subsidies for England and Wales. Reference to the "Annual Review of Agriculture" provides an indication of the importance of government support in the United Kingdom. Support in "special areas"* rose from £34.3 million in 1971//2 to £72.6 million in 1974/15, and accounted for 10.6 per cent and 24.6 per cent of total support respectively for these two years. In 1974/15 an additional hill cow subsidy was paid to cushion the effect of the substantial increase in feedingstuff prices towards the end of 1973 and the dramatic fall in store prices in the autumn of 1974. Without this additional payment the proportion of support tp these "special areas" would have amounted to 18.6 per cent of total support, and would have been 62.5 per cent above the level paid in 1971/12. It is recognised that other livestock sectors may benefit from this support through price levels in store markets.

Appendix III shows the levels of government support to agriculture and direct support to hill and upland farming in the United Kingdom from 1955/56 to 1976//7.

* Support in special areas - hill livestock compensatory allowances additional benefit under F.H.D.S. & F.C.G.S.

3* CHAPTER II.

PHYSICAL DATA.

THE SAMPLE.

Records were available for an identical sample of 53 farms for the 1973/74 and 1974/75 years. Within,this sample, one group of 42 farms depended solely upon rearing cattle ansi sheep, all being eligible for hill cow and hill sheep subsidies, These farms are widely spread but are situated in four main areas. Nine farms are on the eastern Pennines, twenty-one on the west side, six in the Lake District and six in the southern Cheviots. This group of farms was subdivided into 25 hill and 17 upland farms. The steadings on the hill farms were from 400 to 1,500 feet above sea level, and rough and fell grazing lay between 900 and 2,500 feet. On 10 farms the steadings were at 1,000 feet or over and rough and fell grazings were at 2,000 feet or more. Although the steadings on five farms lay between 400 and 500 feet the land rose steeply to fell grazings at over 2,000 feet. For the upland farms the steadings were between. 500 and 1,450 feet above sea level with ten farms having steadings-between 700 and 900 feet and two over 1J)00 feet. Rough and fell grazings on these farms lay betweeen 650 and 1,800 feet with only four farms having this type of grazing over 1,500 feet.

It is a feature of hill and upland farming that there are differences between farms in the control over the land they occupy. Of the twenty-five hill farms thirteen had common fell grazings and on the remainder the rough grazings were sole-occupied. The latter rough grazings varied from enclosed allotment land to large open areas of fell land, often little different from common grazings. Common fell grazing ricghts were exercised on seven of the upland farms and ten farms had sole-occupied allotment land. This would seem to in.dicate a varying degree of supervision over sheep on these farms, assuming that sheep on sole-occupied fell and allotment land could be more easily controlled and managed. For the hill farms with sole- oecupied rough or fell grazings, lambing percentages over the two years averaged 94 compared with 89 on the farms with common fell rights. For the upland farms the difference in lambing results was greater. The farms with sole-occupied fell recorded l22 per cent lambing compared with 109 per cent on the farms with common fell grazings. A further factor in considering lambing was that crossbreeding was much more important on the former farms.

Arable cropping was not important in _either group. Only on three farms in each group was land ploughed, mainly for rape and fodder crops.

The remaining eleven of the fifty-three sample farms formed a second group which produced milk for sale and maintained flocks which qualified for hill sheep subsidy. These farms were all classified as upland using the same criteria as applied to the farms described above. The altitude of the steadings ranged from 600 to 1,300 feet with five farms at about 700 feet and one farm was over 1,000 feet. Common

4. fell grazings lay between 1,000 feet (two farms) and 2,000 feet (one farm). Only one farm ploughed a small acreage of land for fodder roots.

The majority of farms included in all three groups can be described as family farms. Regular labour was employed on seven hill and four upland farms and on one dairy and sheep farm. Many farms hired casual workers for busy periods, particularly hay- time.

Apart from a few farms in each group of mixed tenure, the main tenure system for each group offarms was as follows:

Hill farms 17 tenanted farms had about 90 per cent of the acreage, Upland farms 8 farms owner-occupied over half the acreage, Dairy and 6 farms owner-occupied over three quarters Sheep farms of the acreage.

LAND USE AND LEVELS OF STOCKING. Land Use.

The way in which land is used in general terms is shown in Table 1. As the sample of farms is identical and there were no marked changes in total acreage and its composition, is shown 1973/14 as a representative year. The acreage quoted include assessed an acreage for common fell grazings, in addition to the land held in sole -occupation. A "pasture acreage equivalent" of rough and common fell grazings was estimated in order to provide farm an effective acreage, referred to as "adjusted acres" in certain report. tables in the There are many problems associated with assessments common of grazings and pasture acreage equivalents but local knowledge, reference to stinted commons and consultation with farmers were used ih making appropriate estimates.

Table 1. Acreage Data 1973/14.

Hill Upland Dairy -Land Use per Farm: Farms Farms Sheep Farms Number of Farms 25 17 11

inloye 140.8 170.8 120.2 -Rough Grazings 1090.8 279.9 51.1 Buildings, Roads, etc. 5.8 1.0 1.1 Total Acres (Sole Occupied): 1237.4 451.7 172.4 Assessed Acres of Common Grazing 584.9 117.2 397.4 Total Acres: 1822.3 568.9 569.8 Total Adjusted Acres 473.8 285.6 236.8 Ratio of Outbye to Inbye 11.9:1 2.3:1 3.7:1

5. The average size of the hill farms in actual acres was more than three times that of the upland farms. The former also had a larger proportion of the total acreage classed as rough and common fell grazings amounting to 90 per cent of total acreage, compared with 70 per cent for the upland farms. The hill farms were more dependent on common fell grazings which accounted for 32 per cent of total acreage compared with 21 per cent for upland farms. In terms of "adjusted acres" the latter were on average 188 acres smaller than the hill farms. Arable cropping was not an important feature on these farms, the majority of which were entirely pastoral.

Apart from one farm growing four acres of fodder roots, the land on all the dairy and sheep farms was devoted to grazing livestock. Table 1 demonstrates the importance of rough and common fell grazings on these farms particularly the latter, which accounted for 70 per cent of the total actual acreage. All farmt-txcerised common grazing rights solely utilised by sheep. Of the rough grazing in sole- occupation over 80 per cent was on three farms. The inbye land on these farms was mainly devoted to the dairy herd and other cattle during the main grazing season, the sheep having limited access during the winter.

Stocking Data.

Average numbers of cattle and sheep per farm are given in Table 21 together with average densities of stocking.

Table 2. Stocking Data 1973//4.

Hill Upland Dairy & Sheep Average Numbers of Livestock per Farm: Farms Farms Farms Beef Herd - Bulls 1.4 1.6 Cows 38.9 51.1 Suckler Calves 26.6 35.2 Dairy Cows & Bulls 33.8 Other Cattle - Heifers in Calf 3.7 2.7 10.4 Over 2 years 1.5 1-2 years 13.1 20.7 19.4 Under 1 year 7.5 8.0 24.8 Total Cattle: 91.2 120.8 88.4

Sheep - Rams 17.7 8.7 8.9 Breeding Ewes & Shearlings 867.8 342.3 298.2 Ewe Hoggs 230.7 71.6 113.3 Ram Hoggs 0.8 0.8 Other Sheep 8.4 1.4 4.2 Sheep Under 1 Year 412.7 183.7 169.8 Total Sheep: 1538.1 608.5 594.4 Total Grazing Livestock Units (G.L.U) 184.6 119.8 114.4 Stocking Density - Actual Acres Per G.L.U. 9.9 4.6 4.9 Adjusted Acres Per G.L.U. 2.6 2.4 2.1

6. On these types of farms winter fodder supplies limit the numbers of cattle which can be carried. Thera is 4 strong relationship between ratios of shedp- tO-Ob:ttle-and the proportion' of inbye •land, to total.acres.as_indicated below. , Numbers of Sheep Proportion of ,'1;;• per Beast. Inbye Land. Hill Farms 17 8% Upland Farms 30% Dairy & Sheep Farms . 21%. The - extensive nature of the hill farms is perhaps best illustrated by the fact that on these farms over 10 acres (actual) were required per livestock' unit. This compared with 4.7 acres on the .upland farms and almost 5 acres on the dairy and sheepfarms.

,LARD USE AND STOCKING DATA ACREAGE SIZE GROUPS.

Table 3. Average Acreage Data 1973/74.

Adjusted Acres. Acreage Size Groups. . Under 250. 250-500. Over 500

Number of Farms: 14 14 14 Land Use Per Farm: Inbye 66.2 136.9 255.8 Rough Grazing 186.9 542.5 1558.2 Buildings, Roads, etc. 1.1 1.4 9.1 Total Acres (Sole Occupied) 254.2 680.8 1823.1 Assessed Acres of Common Grazing 151.4 386.3 649.1 Totaf Acres: 405.6 1067.1 2472.2

Total Adjusted Acres 14203 338.4 712.2 Ratio of Outbye to Inbye 5.1:1 6.8:1 8.6:1

••• Table 4. Average Stocking Data 1973/74.

Adjusted Acres. Acreage Size Groups. Under 250. 250-500. Over 500.

Number of Farms: 14 14 14 Numbers of Livestock per Farm: Beef Herd Bulls 0.6 • 2.4 Cows 19,6 43.0 69.0 Suckler Calves 124 28.5 49.5 Other Cattle - Heifers in Calf 1.2 3.9 4.8 Over 2 years 0.2 • 1.6 1-2 years 10.2 16.3 22.1 Under 1 year 5.3, 8.3 9.5 Total Cattle: 49.0 101.6 158.9 _ Sheep - Rams 5.4 13.1 23.7 Breeding Ewes & Shearlings 227.1 588.9 1149.2 Ewe • Hoggs 54.0 153.9 291,2 Ram Hogs 1.3 1.0 Other Sheep .8.4 8.2 Sheep under 1 Year 130.6 07.6 521.8 Total Sheep: 418.4 1971.9 1995.1 • Total Grazing Livestock Units 63.0 149.4 262.6 CHAPTER 1110

FINANCIAL RESULTS.

The following tables and discussion relate to the three groups of farms on a whole farm basis with analysis of the main components of net farm income.

HILL FARMS AND UPLAND FARMS.

Table 5. Outputs Variable and Fec:. Costs and Net Farm Income Hill Farms and Upland F.Irms - Per Adiusted Acre.

103/74 1974/15 Farm Type: Hill land Hill Upland Number of Farms: 25 17 25 17

Enterprise Output: E E E E Breeding Herd 8.52 20.35 8.02 18.95 Other Beef _Cattle 2.66 1:.00 1.82 4.15 Sheep & Wool 24.42 2n 17.28 17.95 Other 0.56 0.51 1:0: -Total Output: 36.16 53.75 27.63 4299:036 Livestock Variable Costs: 5.08 7.36 6.75 Gross Margin Before Forage: 31.08 46.39 20.88 32.73 Forage Variable Costs: 0.77 1.77 0.81 1.67 Gross Margin After Forage: 30.31 44.62 31.06 Fixed Costs: 1 .3y 18.83 2103:0477 22.21 Management & Investment Income: 18.94 25.79 6.60 8.85 Farmer & Wife (Manual Labour): 2.36 4.39 3.35 5.48 Net Farm Income: 21.30 30.18 9.95 14.33 Return on Tenant's Capital* 38 34 12 11

* As defined in Appendix T.

Falling gross output in the face of rising costs resulted in reduced net farm income. In each group of farms the decline in net farm income per adjusted acre was substantial (over 50 per cent). Total output fell by about one quarter and total costs rose by almost 20 per cent. In particular, the rise in feedingstuff prices and the fall in store prices during the period will be remembered by those concerned with hill and upland livestock. A large part of output on these farms arises from sales of store animals in autumn and the level of prices at this time of year has a major influence on output and subsequently net farm income. There were no marked changes between years in beef herd output in each group of farms. It was, however, influenced in 1974/15 by the additional hill cow subsidy. Without this support gross output and net farm income would have declined even further. Sheep output per adjusted acre on the,laill farms was over E2 higher in 1973/14 than on the upland farms but- the decline between years was at a higher rate on the hill farms. Over 60 per cent of total output per adjusted acre was derived from sheep each year on the hill farms, and about 42 per cent on the upland farms. The ratio of outbye to inbye on the hill farms was much higher -at 12:1 compared with 2.3:1 on the upland farms and the outbye on the hill farms was entirely devoted to sheep.

The importance of hill cow* and sheep subsidy is demonstrated in the following table. In 1973n4 these subsidies (including winter keep) represented about one quarter of net farm income in each group of farms® On the hill farms in 1974/15, they exceeded net income by 4 per cent, and accounted for 97 per cent of net farm income on the upland farms®

Table 6. Importance of Hill Subsidies - E Per Farm.

Hill Farms. Upland Farms. 1973/14 1974.175_ 1973/14 1974/15 Total Output 17129 13145 15352 11886 _ Net Farm Income 10090 4735 8622 4047 Hill Cow & Sheep Subsidies 2590 4917 1964 3926 Subsidies % of Total Output 15 37 13 33

Total costs in 1973/14 on the hill farms equalled _almost half of total output, the proportion increasing to 76 per cent in 1974//5. The proportion for the upland farms rose from 52 to 78 per cent® On the hill farms total variable costs increased by 29 per cent and on the upland farms by 21 per cent. Fixed costs were a major part of total costs and rose by 18 per cent in each group between years. They were at a much higher level on the upland farms each year. Expenditure on feedingstuffs and labour was well over half of total costs on the hill farms. Although gross margins after deduction of forage costs declined substantially in 1974/15, they were higher on the upland farms. The much reduced return on tenant's capital in both groups of farms in 1974/15 resulted from the marked fall in profitability between years.

* Hill Cow Subsidy: Inclusive of winter keep grants, and brucellosis incentive payments where applicable.

10. HILL AND UPLAND FARMS - ACREAGE SIZE GROUPS.

Table 7. Output, Variable and Fixed Costs and Net Farm Income per Adjusted Acre by Acreage Size Groups.

197 1974/75. Under A- Over Under 25 Over 250 500 500 250 500 500 Acres, Acres. Acres. I Acres. Acres. Acres. Number of Farms 14 14 14 I 14 14 14 Enterprise Output: Breeding Herd 14.41 13.61 10.20 11.39 13.64 9.89 Other Beef Cattle 8.14 3.84 5.06 4.22 1.81 2.46 Sheep & Wool 28.34 23.64 22.86 21.22 17.63 16.59 Other 1.33 0.78 0.68 1.26 1.05 0.36 Total Output: 52.22 41.87 38.80 38.09 34.13 29.30 Livestock Variable Costs: 8.31 6.54 4.84 10.10 7.76 6.83 Gross Margin Before Forage: 43.91 35.33 33.96 27.99 26.37 22.47 Forage Variable Costs: 1.17 1.21 0.97 1.05 1.69 0.75 Gross Margin After Forage-. 42.74 34.12 32.99 26.94 24.68 21.72 Fixed Costs: 19.80 14.98 11.61 24.31 17.29 13.66 Management & Investment 22.94 19.14 21.38 2.63 7.39 8.06 Income: Farmer & Wife (Manual 7.31 4.14 1.51 9.17 5.50 2.20 Labour): Net Farm Income: 30.25 23.28 22.89 11.80 12.89 10.26 Return on Tenant's % Capital: 34 32 39 4 12 14

DAIRY AND SHEEP FARMS.

The results for the small group of farms where dairying is associated with sheep production from the surrounding fell grazings are presented below. In some cases the whole organisation of the farm revolves around the dairy herd and comparison with lowland farming types may be more appropriate since these farms achieved much higher output per adjusted acre each year. This was mainly due to production from the dairy herd which accounted for about half of total output. Compared with the hill and upland groups, costs of feedingstuffs, fertilizer and labour were much higher due to the more intensive character of dairying enterprise.

11. Table 8. .121L, Variable and Fixed Costs. and Net Farm Income - Per Adjusted Acre. Dairy & Sheep Farms.

1973/74 1974/75 Number of Farms

Enterprise Output: E E Dairy Herd 31.00 32.26 Other Cattle 11.29 10.85 Sheep 20.71 15.87 Other 0.81 1.00 Total Output: 63.81 59.98 Livestock Variable Costs: 22.76 26.40 Gross Margin Before-Torage: 41.05 33.58 Forage Variable Costs: 2.64 2.88 Gross Margin After Forage: 38.41 30.70 Fixed Costs: 21.61 27.14 Management & Investment Income: 16.80 3.56 Farmer & Wife (Manual Labour): 6.29 7.64 Net Farm Income: 23.09 11.20

Return on Tenant's Capital 24 5

In the two years under review the rearing groups of farms averaged higher net incomes per farm than the dairy and sheep farms, as indicated below.

Net Farm Income Per Farm.

Group of Farms. Hill. Upland. Hill/Upland Under 250 acres. Sheep. Year. E E E E 1973/74 10090 8622 4303 5468 1974/75 4735 4047 1673 ,_630

There is evidence from the Farm Management Survey of a gradual movement out of dairying to beef production (.)n farms situated in the area where the sample farms are located.

Livestock subsidies (apart from calf subsidies) were not so important as on the hill and upland rearing farms. These subsidies, almost entirely hill sheep, were only 10 per cent of net farm income in 1973/14, the proportion increasing to 36 per cent in 1974/15.

12. CHAPTER IV.

ENTERPRISE RESULTS.

THE BEEF BREEDING HERD.

Breeds.

Galloway and Galloway cross were the most popular breed of COWS on the hill farms in the sample and Hereford bulls predominated. Only four farms used Galloway bulls. In the upland group about half the farms maintained Galloway and Galloway cross cows, and four farms had Blue Grey. Hereford bulls were maintained on nine farms and White Shorthorn bulls on five. Although on some farms in each group, a proportion of the cows calved in the autumn, the main calving period was in the spring. In each year the upland farms on average maintained ten more cows than the hill farms.

Calving.

In 1973/14, both groups of farms had a similar calving index (95). In the following year both were lower but the upland farms achieved 93 compared with 88 on the hill farms. In the autumn of 1973 it was thought that suckler cows were in a poorer condition than the previous year and this, combined with the constraints *posed by rising feed prices during the winter of 1973/14 and moderate stocks of homegrown fodder, may have been instrumental in depressing the calving index.

Herd Replacement.

Herd replacement rate was similar for both types of farm in each year but was lower at 12 per cent in 1974/15 compared with 17 per cent in 1973/14. The upland farms paid more for replacement cows and heifers than the hill farms. Average price per head paid was less in 1974/15, being £61 per head lower on the upland farms. The lower replacement rate of 1974/75 may have been due to the depression in .beef prices in 1974 resulting in low store prices in the autumn.

Table 9. Out.ut. Variable Costs and Mar•ins er Cow. Beef Breeding Herd.

1973/14 1974/15 Hill Upland Hill Upland E E E E Total Output 103.39 108.00 94.38 103.01 Livestock Variable Costs 16.24 13.46 24.88 18.45 Gross Margin Before Forage 87.15 94.54 69.50 84.56 Forage Variable Costs 4.06 5.13 4.53 5.06 Gross Margin After Forage 83.09 89.41 64.97 79.50 Direct Labour* 12.16 10.84 N.A. N.A. Gross Margin After Forage 70.93 78.57 N.A. N.A. & Labour * Direct Labour Cost not available for 1974/15. 13. Output.

Hill cow subsidy accounted for 26 to 27 per cent of total output in the two groups in 1973/14. The proportion increased in 1974/15 to about 60 per cent on the hill farms and 55 per cent on the upland farms.

The price of calves sold per cow was much lower in 1974/15 in both groups of farms, falling by E22 per cow on the hill farms and £19 on the upland farms. On the hill farms in 1974/15 calves sold averaged £46.6 per head compared with £86 the previous year while corresponding prices for the upland farms were £60.3 and £91.5 per head.

Variable Costs.

The increase in 1974/15, in livestock variable costs per cow on the hill farms was about double that on the upland farms. In both groups the increase was mainly due to higher expenditure on bought concentrates, and purchased bulk foods on the hill farms. Concentrate consumption on the hill and upland farms increased by 1 and 0.5 cwt. per cow respectively, which accounted for a major part of the increased cost per cow. In 1974/15 the hill farms spent 0 per cow more on bought feed than the previous year while on. the uplandfarms feed costs increased by about E5 per cow.

Further reference to feeding rates indicates that the upland farms tended to feed concentrates and hay at a higher rate per head than the hill farms. There was however greater reliance on purchased straw on the latter. The higher feeding rates on the upland farms are due to earlier calving breed.differences and differing housing practices.

Labour.

Information about direct labour costs was only available for the first year of the study. In 1973/14 labour in terms of man days (based on an eight hour working day) was similar in both. groups of farms at about three man days per cow. On the hill farms, however, labour cost £1.30 per cow more than on the upland farms, where a greater proportion of the labour input was provided by the farmer (and wife). The latter was charged at statutory wage rates only, while for hired workers wages included national health insurance and value of cottages and perquisites where appropriate.

BEEF BREEDING HERD - HERD SIZE GROUPS.

The hill and upland rearing farms were classified according to herd size and the results for the two years are presented in Table 10. In reviewing the Gross Margin results there appears to be no relationship between herd size and efficiency.

14. Table 10. Output, Variable Costs and Margins per Cow. Beef Breeding Herd - HerdTh_z-e Groups.

1973/74 Herd Size Group II III IV Number of Cows Up to 29. 3o-49. 50-69. Over 70. Number of Herds 15 9 8 8

Total Output 104.03 101.02 110.98 106.80 Livestock Variable Costs 18.48 13.70 15.23 14.66 Gross Margin Before Forage 85.55 87.32 95.75 92.14 Forage Variable Costs 3.65 3.19 5.29 4.88 Gross Margin After Forage 81.90 84.13 90.46 87.26 Direct Labour 19.91 11.95 10.70 9.75 Gross Margin After Forage and Labour 61.99 72.18 79.76 77.51 1974/15 Total Output 102.45 85.39 103.44 100.78 Livestock Variable Costs 23.63 23.23 20.16 22.65 Gross Margin Before Forage _ 78.82 62.16 83.28 78.13 Forage Variable Costs 3.15 3.09 7.78 4.13 Gross Margin After Forage 75.67 59.07 75.50 74.00

There is some evidence of lower labour requirements as herd size increases. In terms of man days (based on an eight hour working day), labour amounted to five man days per cow in the first group which was double the requirement in group IV. In the other two groups the requirements were between 2.7 and 3 man days per cow.

BEEF BREEDING HERD - COMPARISON OF RESULTS FOR 1968/69-1969/70 & 1973 74- 1974 75. Table 11. Out out Variable Costs and Mar ins er Cow. Beef Breedin_ Herd - 1968 69 1969 70 and 1973 74 1974 75.

1968/69 1969/70 1973/74 1974/75

Total Output 62.84 63.93 105.56 98.41 Livestock Variable Costs 7.82 8.44 14.92 21.88 Gross Margin Before Forage 55.02 55.49 90.64 76.53

Gross Margin at 1974 Values 91.70 87.66 105.15 76.53

15. Results for the beef breeding herd in the current study may be comparecLin general terms with those for an earlier study,. Detaild comparison should not be made since the farms in the studies are not identical.

OTHER BEEF CATTLE.

"Other beef cattle",on the hill and upland farms, relates to • all cattle in the beef enterprise other than the beef breeding herd — i.e. herd replacements, weaned calves transferred from the beef herd and other trading cattle. With such a variety of cattle in different stages of growth, it is difficult to arrive at a useful unit of comparison but the most convenient and practical units are "per grazing livestock unit" and "per £100 output", In Table 12, the measure used is "per £100 output".

• Table 12. Variable Costs and Mar,&ns per £100 Output._ Other Beef Cattle — Hill and Upland Farms.

1973/14 1974/75 Hill U.land Hill U.land

Total Output 100.00 100.00 100.00 100.00 Livestock Variable Costs 39.61 23.87 80.90 70.08 Gross Margin Before Forage 60.39 76.13 19.10 29.92 Forage Variable Costs 3.87 2.42 7.34 8.41 Gross Margin After Forage 56.52 73.71 11.76 21.51 Direct Labour 15.61 7.13 N.A. N.A. Gross Margin After 40.91 66.58 Fora e and Labour

Each group of farms showed substantial increases between years in livestock variable costs per -E100 output, largely due to marked increases in purchased feeds, particularly concentrates. Purchased concentrates per £100 output on the hill farms doubled between years, and on the upland farms in 1974/15, they were over three times the level in 1973/14.

In 1973/14, for which year cost of labour was available, the proportion of output accounted for by direct labour on the upland farms was less than half that on the hill.farms. Gross margin was much higher on the former farms by about £26 per £100 output. In terms of physical input, labour requirements on the hill farms and upland farms were 3.6 and 3.2 man days per grazing livestock unit respectively.

. Use of the alternative unit of comparison indicates that there were substantial declines in output per grazing livestock unit in both groups. This was due to lower market prices received in 1974/15 and the relatedclosing valuation. On the hill and upland farms output declined by 41 and 67 per cent respectively.

16. THE SHEEP ENTERPRISE.

The following deals with the sheep enterprise on the three groups of farms in the two years under review. This sector was an important part of production, particularly on the hill and upland farms wheresheep output accounted for over 60 per cent and 42 per cent of total output per adjusted acre respectively. On the dairy and sheep farms the proportion was lower at 32 per cent in 1973/14 and 26 per cent in 1974/15.

Breeds.

The distribution of the various breeds of ewes among the groups was as follows:- Hill Upland Dairy & Farms. Farms. Sheep Farms. Swaledale 10 7 6 Scotch Blackface 5 4 - Rough Fell 6 5 5 Other Breeds 4 1 _ 25 17 11

Swaledale ewes were the most popular breeds in all groups, followed by Rough Fell. In fact, of the 53 farms included in the above table, 43 per cent maintained Swaledale ewes and 30 per cent Rough Fell ewes. The variation in breeds on the hill and upland farms reflects the wider geographical dispersion of the farms, compared with the dairy and sheep farms.

A feature of the upland farms was the production of crossbred lambs, using rams such as the Leicester, Teeswater or Wensleydale, with 55 per cent of the ewes put to the crossing ram. In the hill group 19 per cent of the ewes were crossed, and 13 per cent on the dairy and sheep farms, the proportion of ewes crossed on the farms in each group varying considerably. On the upland farms almost 40 per cent of theewes eligible for subsidy received the basic rate while in the other groups almost all ewes qualified for the higher rate of subsidy.

Flock Maintenance.

Purchases of sheep were in general for flock maintenance, and lambing results mainly determine the level of sheep sales. The hill farms reared about 93 lambs per 100 breeding ewes while on the upland farms lambs reared rose from 115 to 119 per cent between years and on the dairy and sheep farms 102 per cent lambing was achieved in both years. The proportion of lamb deaths to total born was not over 5 per cent in any group in the two years. Flock mortality averaged 6 per cent.

Replacement rate was highest on the dairy and sheep farms at 37 per cent compared with about 27 per cent in the other groups of farms. On the upland farms about 5 per cent of the ewes for replacement were purchased.

17. On the hill farms, 52 lambs out of every 100 reared were sold as stores, with 30 being retained for replacement. Sales through the fat market were much higher on the upland and dairy and sheep farms. The number of lambs sold fat per 100 lambs reared rose from 28 to 33 on the upland farms and from 33 to 38 on the dairy and sheep farms possibly due to some producers responding to the lower rate of decline in fat prices compared with store. Although replacement rates per 100 ewes were similar on the hill and upland farms, the number of lambs retained for replacement per 100 lambs reared was much lower at 16 per cent on the upland farms. This was due to the higher lambing achieved by the flocks on the latter farms, and resulted in a higher proportion of lambs being available for sale. On the dairy and sheep farms about 38 lambs out of every 100 reared were retained as replacements. The management policy on these farms was to maintain ewe flocks with younger age structures, and draft out ewes at an earlier stage than in the other farm groups.

Ouput.

The prices received for all classes of sheep sold were lower in all groups in 1974/15 than in the previous year: for draft ewes in all groups between E5 and E6 and for store lambs E2 to £3 per head. In the hill and upland groups the price of fat lambs declined by £1.50 per head between years and by £2.20, per head in the dairy and sheep group.

Wool clips were about 10 per cent heavier on the upland and dairy and sheep farms, the average weight per fleece being 4.30 to 4.40 lbs., compared with 3.90•1bs. on the hill farms. Although the average price received per lb. of wool was similar in all groups over the two years, the upland and dairy and sheep farms received 17 pence more per fleece than the hill farms. The presence of the heavier woolled Rough Fell sheep on these farms influenced the weight and value of wool.

Table 13. Output, Variable Costs and Margins. The Sheep Flock - Per 100 Ewes _put to the Ram.

Dairy and Farms. Farms. Hill Upland Sheep Farms. 1973/74 1974/75 1973/74 1974/15 1973/14 1974/75

Total Output 1354.9 962.3 1844.6 1445.9 1638.5 1217.1 • Livestock Variable Costs 132.3 154.7 172.9 220.5 220.8 283.2 Gross Margin Before 1222.6 807.6 1671.7 1225.4 1417.7 933.9 Forage Forage Variable Costs 18.5 15.8 47.4 25.7 33.5 31.6 Gross Margin After 1624.3 1199.7 1384.2 902.3 Forage 1204.1 791.8 Direct Labour 124.1 N.A. 194.6 LA. 201.9 LA. Gross Margin After 1080.0 1429.7 LA. 1182.3 LA. Forage & Labour N.A.

18. In all groups, sheep output per 100 ewes fell between years: on the hill farms by almost 30 per cent, the upland farms by 22 per cent and 26 per cent on the dairy and sheep farms. The higher fall on the hill farms was due to their greater dependence on the store lamb market.

The value of iamb sales per 100 ewes also declined between years in all groups mainly due to a marked fall in store lamb prices. On the hill and upland farms the values of store lambs sold per 100 ewes were about one third lower in 1974/15. The fall between years on the dairy and sheep farms was 46 per cent. In 1973/14 rising market prices were reflected in flock maintenance and resulted in the latter making a contribution to output whereas flock maintenance in 1974/75 became a charge on the sheep flock. Although a higher rate of hill sheep subsidy was available in 1974/15, the effect of lower lamb prices and the flock maintenance charge was lower output per 100 ewes. In 1973/74 hill sheep subsidy accounted for between 9 and 13 per cent of output in the three groups. The proportion rose in 1974/75 to one fifth on the upland farms, to one quarter on the dairy and sheep farms and to one third on the hill farms.

Costs.

The rise in total livestock variable costs was to a large extent due to the increased cost of purchased concentrates which accounted for over half the increases in livestock variable costs on the hill and dairy and sheep farms and 87 per cent on the upland farms. The dairy and sheep farms relied much more on purchased bulk foods than the other farms and the amount of concentrates fed per 100 ewes on the upland and dairy and sheep farms was over twice that on the hill farms. Consumption of hay was also at a much higher rate particularly on the dairy and sheep farms.

An important feature of the hill and dairy and sheep farms was their dependence on hired grazing, particularly for away wintering of ewe hoggs. In a few cases grazing was hired by the acre during both summer and winter for use by both cattle and sheep. Of the total number of ewe hoggs on the hill farms about 60 per cent were away-wintered.- The price was based on an agreed number of weeks and a rate per head per week. The proportion sent away varied on individual farms: all ewe hoggs were wintered at home on three hill farms and all hoggs on eight farms were sent to winter grazing. On the dairy and sheep farms the proportion away-wintered was 66 per cent in 1973/14 and 58 per cent in 1974/15. The upland farms away-wintered 31 per cent of the ewe hoggs each year, but this was confined to five farms.

The ewe hoggs sent away for winter from the hill farms spent varying periods on the hired grazings, ranging from a few weeks to full terms of twenty weeks or more. The quality of hired grazing also varied with a variety in farmers motives for away-wintering. Hogg wintering hired by the upland and dairy

19. and sheep farms was in general good quality inbye pasture. With the intensive character of the dairy and sheep farms, acquiring winter grazing for the ewe hoggs is important in relieving pressure on grazing in spring.

Wintering - Distribution of Farms within Various Price Ranges.

1.00 1.50 2.00 2.50 3.00 Price Range (E) to to to to and Total 1.49 1.99 2.49 2.99 Over Hill Farms 1973/14 4 6 7 5 22 1974/15 3 5 5 8 1 22 Upland Farms 1973/74 4 5 1974/75 3 2 5 Dairy & Sheep Farms 1973/14 6 1 1 8 1974/15 1 2 5 8

Costs of veterinary and medicines were much higher each year on the upland and daiWy and sheep farms. Between years they increased 22 per cent on the hill farms but the increase on the other farms was small. Averaged over the two years veterinary and medicine costs were 63 and 73 pence per ewe on the uplaRS and dairy and sheep farms respectively compared with 43 pence on the hill farms.

Direct labour costs per 100 ewes in 1973/14 were considerably higher on the upland and dairy and sheep farms than on the hill farms. On the latter this cost amounted to £1.24 per ewe and about E2 per ewe on the other farms. The labour requirements on the hill farms was 0.3 man days per ewe compared with 0.5 on the upland and dairy and sheep farms.

20. THE SHEEP ENTERPRISE - FLOCK SIZE GROUPS.

Table 14. Output, Variable Costs and Marzinp., Flock Size Groups - Per 100 Ewes put to the Ram.

1973/14-Flock Size Groups I 11 III IV V Number of Ewes Up to 200 to 400 to 000 to Over 199 399 599 799 800 Number of Flocks 10 13 12 9 9

Total Output 1652.4 1846.7 1618.5 1458.6 1315.0 Livestock Variable Costs 137.4 219.1 183.5 173.9 106.2 Gross Margin Before Forage 1515.0 1627.6 1435.0 1284.7 1208.8 Forage Variable Costs 31.3 29.2 44.2 30.9 13.3 Gross Margin After Forage 1483.7 1598.4 1390.8 1253.8 1195.5 Direct Labour 219.0 221.2 160.4 146.0 113.6 Gross Margin After Forage and Labour 1264.7 1377.2 1230.4 1107.8 1081.9

1974/15 Total Output 1211.2 1306.4 1304.0 1101.5 902.7 Livestock Variable Costs 182.2 281.3 213.3 200.3 131.6 Gross Margin Before Forage 1029.0 1025.1 1090.7 901.2 771.1 Forage Variable Costs 19.6 24.4 23.4 38.1 7.6 Gross Margin After Forage 1009.4 1000.7 1167.3 863.1 763.5

Numbers of Flocks and Type of Farm. •

Flock Size Group I II III IV V Hill Farms 1 3 6 8 Upland Farms 6 4 5 1 1 Dairy & Sheep Farms 3 6 2 10 13 - 12 9 9

The fall in output between years in all groups was mainly due to the decline in value of lambs sold per 100 ewes, particularly store lambs, and flock maintenance cost in 1974/15. Store lamb sales in the first two groups were £1.71 per ewe lower and in the last two groups £1.50 lower in 1974/15. In group III they were £1.87 per ewe lower.

Livestock variable costs per 100 ewes increased in all groups between years, mainly due to increased expenditure on concentrates.

21. DAIRY HERD AND OTHER CATTLE.

The results for the dairy herd and other cattle on the dairy and sheep farms are summarised in Table 15. The sheep enterprise on these farms was dealt with above. Although output from the dairy herd and from other cattle was assessed separately, allocation of variable and direct labour costs were not available. The results were calculated on a per farm (herd) basis.

Table 15. Output, Variable Costs and Margins. Dairy and Other Cattle - Per Farm.

1973/14 1974/15 E E Dairy Herd Output 7339 7580 Other Cattle Output 2674 2550 Total Output 10013 10130 :- Livestock Variable Costs 4643 5316 Gross Margin Before Forage 5370 4814 Forage Variable Costs 525 580 Gross Margin After Forage- 4845 4234

There was little change in gallons of milk produced per farm between years. The value of milk sold, however, increased by 20 per cent, due to a price increase of about 5 pence per gallon. The value of calves sold and transferred from the dairy herd to other cattle declined by about two thirds. This offset to a large extent the increase in the value of milk sold, and output from the dairy herd rose by only 3 per cent between years.

Livestock and forage variable costs increased between years, and together accounted for over 50 ,per cent of total output in 1973/14 and nearly 60 per cent in 1974/75. Gross margins before and after forage declined by 10 and 13 per cent respectively between years.

Purchased concentrates per farm formed a major part (85 per cent) of livestock variable costs and increased 16 per cent between years. The rise in forage variable costs was mainly due to increased cost of fertilizers. Table 16. Output from the Dairy Herd - E per Cow.

1973/74 1974/75 Average Herd Size j 32.6 32.6 Milk Yield - gallons per cow 806.0 808.0

Milk 193.3 232.3 Calves - Sold 17.5 5.5 - Transferred Out 24.5 8.2 Total 235.3 246.0 Herd Maintenance 10.4 13.3 Dairy Output 224.9 232.7

22. COMPARISON OF ENTERPRISE RESULTS.

Table 17. Out ut Variable Costs and Mar ins aer Grazin Liyestock Unit. A Comparison of Enterprises.

Other Beef Beef Herd. Sheep; Enterprise: Cattle. 1973/74 1974//5 1973/74 1974/75 1973/74 1974/75 (a) Hill Farms Enterprise Output 107.2 98.7 91.7 53.7 86.9 61.0 Livestock Variable Costs 16.8 26.0 36.3 43.4 8.5 9.8 Gross Margin Before Forage 90.4 7207 55.4 10.3 78.4 51.2 Forage Variable Costs 4.2 4.7 3.6 3.9 1.2 1.0 Gross Margin After Forage 86.2 68.0 51.8 6.4 77.2 50.2 Direct Labour 12.6 N.A. 14.3 N.A. 8.0 N.A. Gross Margin After Forage & Labour 73.6 LA. 37.5 N.A. 69.2 Grazing Livestock Units % 20 72 (b) Upland Farms Enterprise Output 112.2 106.8 166.0 52.6 121.9 94.3 Livestock Variable Costs 14.0 19.1 39.6 36.9 11.4 14.4 Gross Margin Before Forage 98.2 87.7 126.4 15.7 110.5 79.9 Forage Variable Costs 5.3 5.3 4.0 4.4 3.1 1.7 Gross Margin After Forage 92.9 82.4 122.4 11.3 107.4 78.2 Direct Labour 11.3 LA. 11.8 N.A. 12.9 N.A. Gross Margin After Forage & Labour 81.6 N.A. 110.6 N.A. 94.5 N.A. Grazing Livestock Units % 41 16 43

On hill farms, the beef herd margins were consistently higher than those achieved by the other enterprises though in the second year of the study they were adversely affected by the combination of the marked fall in store prices and the increase in inputs. However the effect of these changes was reduced by the additional hill cow subsidy payment.

The other beef cattle, heavily dependent on ex-farm resources, suffered most severely from the depression in store prices.

Although the sheep enterprise on the hill farms in terms of grazing livestock units was much more important than on the upland farms, the greater productivity on the latter is well illustrated in Table 17. The results for the sheep enterprise in 1974//5 in both groups of farms were more attractive than the other beef cattle enterprise, and the beef herd excluding the additional hill cow subsidy.

23. CHAPTER V.

COMPARISON OF RESULTS FOR 1973/14 TO 1975//6.

This review refers primarily to the financial and other results achieved by selected identical groups of farms in 1973/14 and 1974/15. Some data subsequently became available for 1975/76, and a comparison of the main changes over the three years is given below. The results relate to the rearing farms which were subdivided as previously into hill farms (23) and upland farms (16).

There was little change over the three years in average size of farm and number of cattle carried while the sheep enterprise showed some increase.

Table 18 shows output, variable and fixed costs and net farm income per adjusted acre from 1973/14 to 1975/76. Changes in market prices are reflected in valuations, output and subsequently net farm income especially in 1975/76, where breeding cow values were increased by about £50 per head, and breeding ewes and hoggs by E2 per head.

Table 18. Out•ut Variable and Fixed Costs and Net Farm Income. a Hill Farms and b Upland Farms - Per Adjusted Acre.

1973/74 1974/75 1975/76 (a) Hill Farms (23) Total Output 35.45 27.22 47.96 Variable Costs 6.01 7.63 9.01 Gross Margin After Forage 29.44 19.59 38.95 Fixed Costs 11.33 13.36 16.93 Management & Investment Income 18.11 6.23 22.02 Farmer & Wife (Manual Labour) 2.44 3.46 4.36 Net Farm Income 20.55 9.69 26.38

Return on Tenant's Capital 36.60 11.70 36.40

(b) Upland Farms (16) E E Total Output 53.75 42.29 74.26 Variable Costs 9.11 11.05 13.08 Gross Margin After Forage 44.64 31.24 61.18 Fixed Costs 18.75 22.17 27.31 Management & Investment Income 25.89 9.07 33.87 Farmer & Wife (Manual Labour) 4.21 5.26 6.28 Net Farm Income 30.10 14.33 40.15

Return on Tenant's Capital 34.20 11.20 38.40

24. The Beef Breeding Herd.

Table 19. Output,)tivestock Variable Costs and Gross Margin Before Forage 1973/14 to 1975/76. Per Cow.

q7 1973/74 1974/75 1975/76 - (a) Hill Farms E E E Total Output 103.00 93.56 157.13 Livestock Variable Costs 16.68- 24.89 30.22 Gross Margin Before Forage 86.32 68.67 126.91

(b) Upland Farms E E E Total Output 108.01 103.10 170.15 Livestock Variable Costs 13.33 18.54 23.86 Gross Margin Before Forage _A4068 - 84.56 146.29

Total output includes cost of maintenance which depends upon the values of replacement and culled cows, death rate and valuation differences. These factors determine whether herd maintenance is a charge to the enterprise or contributes to output. As indicated earlier the unit value of cows was increased by £50 per head in the 1975//6 closing valuation. In this year herd maintenance showed an appreciation compared with a depreciation (cost) in the previous two years. In both groups output per cow rose by 68 to 70 per cent between 1974/75 and 1975/76. In the latter year it was substantially higher than the levels in 1973/74. The recovery in output in 1975/76 from the previous year, resulted mainly from improved sale prices of calves, the higher value of calves retained and a positive herd maintenance.

Table 20. Out ut and Gross Mar in Before Fora e Excludin_ Additional Hill Cow Subsidies and Valuation Increases. Per Cow.

Hill Farms Upland Farms 1973)/74 1974/75 1975/76 1973/74 1974/75 1975/76 Output Excluding E Additional Subsidies 103.0 65.8 152.6 108.0 74.9 165.7 Additional Subsidies & Valuation Increase 103.0 65.8 102.6 108.0 74.9 115.7 Gross Margin Before Forage Excluding Additional Subsidies 86.3 41.9 122.4 94.7 56.3 141.8 Additional Subsidies & 86.3 Valuation Increase.*- 41.9 72.4 94.7 56.3 91.8

25. Between 1973/14 and 1974/15, average price received for calves sold fell by £39 per head on the hill farms and by £31 on the upland farms while in both groups prices recovered in 1975//6 by about £50 per head.

Livestock variable costs in both groups were about 80 per cent higher in 1975/76 than in 1973/14, purchased foods being a major proportion in all years in both groups.

The Sheep Enterprise.

Table 21. Output, Livestock Variable Costs and Gross Margins Before Forage 1973/74 to 1975/76. Per 100 Ewes put to the Ram.

1973/74 1974/75 1975/76 (a) Hill Farms Total Output 1321.2 944.8 1525.1 Livestock Variable Costs 135.4 157.8 165.3 Gross Margin Before Forage 1185.8 787.0 1359.8

(b) Upland Farms Total Output 1845.1 1449.4 2149.8 Livestock Variable Costs 174.2 221.6 267.0 Gross Margin Before Forage 1670.9 1227.8 1882.8

Total output from the sheep flock includes the cost of maintaining the flock which in both groups showed an appreciation in 1973/14 and 1975/76 of £1.50 per ewe respectively. In 1974/15 however, it represented a charge of about £1.80 per ewe, mainly due to the lower level of prices received for draft and cast sheep.

26. APPENDIX I.

ACCOUNTING METHODS AND DEFINITIONS.

1. Definition of Hill and Upland Farms. The farms were distinguished using the criteria listed below, and the farms satisfying three (or four) of the criteria were classified as hill farms. Those with two (or less) were regarded as upland farms._ (a) The farm is in receipt of the basic plus the supplementary rate of hill sheep subsidy. (b) The ratio of actual acres of rough and fell grazings to inbye is equal to or exceeds 5:1. (c) The proportion of sheep to total output is equal to or exceeds 50 per cent. (d) The grazing livestock density_is equal to or exceeds five actual acres per grazing livestock unit. 2. Farm Acreages. "Assessed Acres of Common Grazing" is an estimate of the actual acres utilised by the farm exercising rights of common grazing. "Adjusted Acres" are the acres of the farm, after rough grazings in sole occupation and assessed acres of common grazings have been converted to a pasture acreage equivalent. 3. Whole Farm Data. "Total Output": The sum of all enterprise outputs plus miscellaneous output. The definition of output from the various enterprises is described below. "Livestock Variable Costs": All costs directly attributable to livestock enterprises. The main costs are purchased concentrates and bulk foods, agistment, veterinary/Medicines and service fees, casual labour and contract work.

"Forage Variable Costs": Costs of seeds, fertilizers and sprays applied to grazing and mowing land and to other fodder crop areas. "Fixed Costs": Costs which cannot be allocated to a specific enterprise. These include regular labour, machinery including depreciation, rent and rates, and general overheads.

"Mana ement and Investment Income": The difference between total output and livestock and forage variable costs plus fixed costs (including the value of the manual labour of the farmer and wife). "Net Farm Income": Management and investment income plus the value of the manual labour of the farmer and wife. "Tenant's Capital": The average of the opening and closing valuations of livestock, crops, stores and the written dawn value of machinery and equipment.

4. Enterprise Outputs. "Beef Herd Output": Revenue from calves sold plus the value of calves retained, hill cow and calf subsidies and house credits less herd depreciation (or plus, if appreciation) and cost of calf replacements. 27. "Other Beef Cattle Output": Sales of cattle (not accounted for above) plus transfers to the beef herd (e.g. calving heifers), and credits and closing valuation, less purchases plus transfers from the beef herd and opening valuation., "Flock Output": Revenue from lambs sold fat and store plus the value of lambs retained for breeding and store, hill sheep subsidy, wool and house credits less flock maintenance (or plus, if appreciation). "Total Sheep Output": Flock output plus output from other sheep (e.g. sheep retained in the previolls year or transfers out from the breeding flock). "Dairy Herd Output": Revenue from milk and calves sold plus the value of - calves transferred to other cattle for rearing, less herd maintenance. "Total - Cattle Output (Dairy and Sheep Farms)": Dairy herd output plus output from other cattle.

5. Enterprise Costs: "Livestock Variable Costs": All costs attributable to a specific enterprise. "Forage Variable Costs": Costs allocated to the appropriate enterprise according to the number of grazing weeks and consumption of fodder crops. "Direct Labour": Cost of labour based on the hours spent on feeding and general management and allocated to the appropriate enterprise.

6. Margins. "Gross Margin Before Forage": Total output less livestock variable costs. "Gross Margin After Forage": Total output less livestock and forage variable costs. "Gross Margin After Forage and Labour": Total output less livestock and forage variable costs and direct labour.

7. Other. "Sale Prices of Values of Livestock Retained": Sales were credited net of commission and "luck" received. Livestock retained were valued in consultation with the farmer and reference to market prices. "Herd and Flock Maintenance": (0 Herd maintenance is the difference between the opening valuation of the breeding herd plus cows purchased and heifers transferred in and the closing valuation of the breeding herd plus cows sold. (b) Similarly flock maintenance is the difference between the opening -Valuation plus purchases and transfers in and the closing valuation plus sales. In both cases account was taken of deaths.

28. "Livestock Units": The conversion factors used to convert the number of animals into livestock units were as follows:- Bulls 0.8 Rams 0.10 Dairy Cows 1.0 Breeding Ewes 0.10 Beef Cows 0.8 Ewes & Ram Hoggs 0.10 Suckler Calves 0.2 Other Sheep-Over 1 yr. 0.10 Heifer in Calf 0.8 " -Under 1 yr. 0.05 Other Cattle-Over 1 yr. 0.8 " 1-2 yrs. 0.6 I/ -Under 1 yr. 0.4

29. APPENDIX 11.

Table 1. Characteristics of the Average Farm. LE-RDS SAMPLE FARMS. 1973/14.

! Farm Type: Hill & Upland. Dairy & Sheep. Number of Farms 7 9 Land Use Per Farm: E E . Inbye 139.0 109.2 Rough Grazing 349.1 89.2 Buildings, Roads, etc. _ _ Total Acres (Sole Occupied) 488.1 198.4 Assessed Acres of Common Grazing 199.4 88.5 . Total Acres 687.5 286.9 Total Adjusted Acres 267.3 148.4

Ratio of Outbye to Inbye 4.0 1.6

Average Stocking: Beef,Herd - Bulls 1.3 - - Cows 41.8 0.4 - Suckler Calves 27.9 - Dairy Herd - Bulls - 0.6 - Cows - 25.6 Other Cattle - Heifers in Calf 5.1 6.4 - Over 2 years - _ - 1-2 years 11.3 18.3 - Under 1 year 8.7 23.6 . Total Cattle: , 96.1 74.9 , Sheep - Rams 10.7 5.7 - Breeding Ewes & Shearlings 359.7 229.4 - Ewe Hoggs 88.7 62.4 - Ram Hoggs 1.1 2.2 - Other Sheep 13.9 1.0 - Sheep Under 1 year 202.0 118.6 Total Sheep: 676.1 419.3 Total Grazings Livestock Units 112.0 89.0 ,n

30. APPENDIX II.

Table 2. Output, Variable and Fixed Costs and Net Farm Income. PER ADJUSTED ACRE. LEEDS SAMPLE FARMS. 1973/74.

Farm Type: Hill & Upland. Dairy & Sheep. Number of Farms 7 9 • Average Size of Farm (Adjusted Acres) 267.3 148.4

Enterprise Output: E E Beef Breeding Herd 17.21 Dairy Herd 44.11 Other Cattle 2.81 9.72 Sheep and Wool 17.58 20.64 Other 1.77 1.48 Total Output: 39.37 75.95 Livestock Variable Costs: Purchased Concentrates 3.59 18.99 ' Purchased Bulk Foods 0.39 1.11 Homegrown Concentrates 0.51 Agistment 0.01 1.47 Veterinary and Medicines 0.74 1.18 Other 1.11 2.51 Total Livestock Variable Costs: 6.43 25.26 . Gross Margin Before Forage: 32.94 50.69 Forage Variable Costs: Seed 0.10 _ Fertilizer 1.55 1.97 Sprays 0.08 Total Forage Variable Costs: 1.73 1.97 Gross Margin After Forage: 31.21 48.72 Fixed Costs: Labour 7.88 15.37 Machinery , 3.77 6.38 Rent, Rental Value & Rates 2.23 3.20 General 1.11 2.98 Total Fixed Costs: 14.99 27.93 Management .8c Investment Income: 16.22 20.79 Farmer & Wife (Manual Labour): 4.71 8.42 Net Farm Income: 20.93 29.21

Tenant's Capital: Livestock 43.87 64.70' Crops & Stores 2.07 1.58 Machinery 11.24 17.01 , Total Tenant's Capital: 57.18 83.29

31. APPENDIX 11.

Table 3. Outputt_ Variable Costs & Margins. LEEDS SAMPLE FARMS. 1973/74.

Beef Breeding Herd* Sheep Enterprise. E Per Breeding Cow. E per 100 Breeding Ewes put to Ram. Number of Herds 7 Farm Type: Hill & Dairy verage Size of Herd 42 Upland. & Sheep. umber of Calves Reared 43 Number of Flocks* per Herd 7 verage Size of Flock 367 233 Enterprise Output: Number of Lambs Reared Calves Sold 57.0 404 237 per Flock. Calves Transferred Out 14.9 Valuation Change 21.1 Enterprise Output: Subsidies - Hill Cow 26.6 Lambs -Fat - Calf 11.0 Sold 16.8 -Store Other 0.8 746.8 670.7 Lambs Retained-Breeding 183.9 200.0 Total: 122.4 -Store 17.6 4.5 Herd Maintenance 6.9 Hill Sheep Subsidy 169.3 173.9 Calf Replacement 5.6 Wool 92.4 96.3

Other 11.1.1.1 Total 0u-bout: 109.9 Total: Livestock Variable Costs: 1226.8 1145.4 Flock Maintenance Purchased Concentrates 9.a 10.1 157.8 Purchased Bulk Foods 2.1 Flock Output: 1236.9 1303.2 Homegrown Concentrates 2.3 Other Sheep Veterinary & Medicines 0.8 Output: 42.1 12.4 Other 1.8 Total Sheep Output: 1279.0 1315.6 Total Livestock 16.0 Livestock Variable Costs: Variable Costs: Purchased Concentrates 42.5 41.5 Gross MarV_n Before 93.9 Purchased Bulk Foods 7.2 Forage: Agistment 23.4 Veterinary & Forage Variable Costs: Medicines 39.5 29.8 Seed Haulage 4.4 8.5 Other 15.0 Fertilizer 3.7 27.3 Sprays Total Livestock 0.1 Variable 101.4 137.7 Total Fora Costs: e Variable 3.8 Costs: Gross Mar in Before 1177.6 1177.9 Gross Margin After 90.1 Forage: Fora e: Forage Variable Costs: Seed Fertilizer 32.2 22.1 * Hill and Upland Herds. Sprays 1.7 Total Forage Variable 22.1 Costs: 33.9 . Gross Margin After 1143.7 1155.8

irect Labour: 163.7 186.7 Gross Margin After 980.0 969.1 Forage & Labour:

* Ewes put to Ram.

32. APPENDIX III.

TOTAL GOVERNMENT SUPPORT TO AGRICULTURE AND DIRECT SUPPORT TO HILL AND UPLAND FARMING - UNITED KINGDOM. E MILLION.

I Year. Total Direct Support Winter, Hill Subsidies. Cattle Support. Em. % Keep. Sheep. Livestock & Cow. Compensatory Allowances. 1955/56 200.8 6.8 3.4 2.6 1.1 1956/57 234.5 7.5 3.2 1 2.7 1.1 1957/958 279.4 6.7 20 2.9 1958/59 236.4 6.8 2.9 3.1 ! 1959/60 251.5 7.3 2.9 4.1 1960/61 257.3 7.8 3.0 1 4.6 0.7 1961A2 334.5 8.1 2.4 5.0 0.8 1962A3 301.2 9.0 3.0 5.4 1.4 1963A4 285.1 10.1 3.5 5.6 2.4 1964A5 255.4 15.6 6.1 2.5 5.7 6.0 1965/66 227.8 15.8 6.9 3.4 6.7 4.4 1966/67 218.8 20.2 9.2 3.7 7.5 8.0 1967A8 250.6 20.0 8.0 4.5 8.7 5.9 1968A9 256.7 23.3 9.1 4.6 10.3 7.2 1969/10 268.3 26.8 10.0 4.9 11.8 7.2 1970/11 256.5 31.5 12.3 5.1 13.9 9.0 1971/12 322.7 34.3 10.6 5.1 ,14.7 9.8 1972/13 266.7 36.2 13.6 6.3 15.5 9.1 1973/14 306.4 40.7 13.3 7.0 16.9 10.4 1974/15 295.1 72.6 24.6 12.3 35.4 19.8 1975/16* 229.8 55.6 24.2 2.8 5.5 6.9 32.8 1976/77** 171.7 59.6 34.7 51.3

* Forecast. ** Estimate.

Source: Annual Review and Determination of Guarantees, 1968, 1970. H.M.S.O. Annual Review of Agriculture. 1973 to 1976. H.M.S.O. -

Note: Total support excludes administrative costs and receipts from F.E.O.G.A. Guidance Section of £4.3 and £7.7 million in 1975//6 and 1976/77 respectively.

33. PUBLICATIONS IN THIS SERIES.

No 23 Veterinary and Medicine Costs and Practices in Lowland Sheep. University of Exeter. September 1973. 30p.

No 24 Results of Pig Management Schemes 1973. University of Cambridge. January 1974. 30p.

No.25 Dry Bulb Onions: A Study of production economics of the 1971 dry bulb onion crop in the East Midland Region including the Holland Division of Lincolnshire. University of Nottingham. November 1973. 40p.

No 26 Pig Production: Results of a study in South West England in 1972//3. University of Exeter. January 1974. 35p.

NO.27 Dessert Apples and Pears in 1972//3. Wye College (University of London). April 1974. 40p.

No.28 Beans for Processing. University of Cambridge. May 1975. 50p.

No.29 Hardy Nursery Stock in England & Wales. A brief study of scale, location and structure. University of Bristol. August 1974. 25p.

No 30 Pig Management Scheme 1974. University of Cambridge. January 1975. 50p.

No 31 Pig Production: Results of a study in South West England 1973/14. University of Exeter. February 1975.

No.32 Field Beans: A study of the husbandry and production economics of the 1973 crop in England. University of Nottingham. March 1975, 60p.

No 33 Culinary Apples in 1973. Wye College (University of London). 1975 (Issued January 1976). 70p.

34, No.34 Dessert Apples & Pears: 1973 and after. Wye College (University of London). June 1976. £1.25

No.35 Grass as a Break. An Economic Study in Southern England. University of Reading. December 1975. £1.00

No.36 Grass on the Arable Farm. University of Nottingham. January 1976. 90p.

No.37 Pig Management Scheme: Results for 1975. University of Cambridge. December 1975. 65P. No.38 The Early Strawberry Crop. University of Exeter. February 1976. £1.00

No.39 Pig Production: Results of a study in S.W. England 1974/15. University of Exeter. January 1976. 75P• No.40 Fattening Older Cattle on Grass. University of Nottingham. April 1976.

No.41 Oilseed Rape: 1975. University of Reading. September 1976.

No.42 The U.K. Broiler Industry 1975. University of Manchester. September 1976. £1.50

No.44 Early Potato Production in England and Wales 1975. University of Aberystwyth. January 1977. £1.00

No.46 Ewe Flocks in England. Breeds, lamb production and other aspects of husbandry 1973-74. University of Exeter. November 1976. £1.00

No.49 The Economics of Cider Apple Production. University of Bristol. February 1977. 60p.

No.50 •Fodder Crops. University of Reading. March 1977. 70p.

35. No.51 Pig Management Scheme. Results for 1976. University of Cambridge. December 1976. 70p.

No.52 Pig Production in S.W. England 1975//6. University of Exeter. January 1977. 75p• No.54 Hill and Upland Farming in the North of England. University of Newcastle upon Tyne. May 1977. £1.50

36. UNIVERSITY DEPARTMENTS.

CAMBRIDGE Department of Land Economy, University of Cambridge, 199 Silver Street, Cambridge. CB3 9EL.

EXETER Agricultural Economics Unit, Department of Economics, University of Exeter, Lafrowda, St. German's Road, Exeter. EX4 6T11.

LONDON School of Rural Economics & Related Wye College, Studies Nr. Ashford, Kent. TN25 5AH.

MANCHESTER Department of Agricultural Economics, The University, Manchester. M13 9PL.

NEWCASTLE Department of Agricultural Economics, The University, Newcastle upon Tyne, NE1 7RU.

NOTTINGHAM Department of Agriculture & Horticulture, University of Nottingham, School of Agriculture, Sutton Bonington, Loughborough, Leics. LE12 5RD.

READING • Department of Agricultural Economics, University of Reading, Building No.4, Earley Gate, Whiteknights Road, Reading. RG6 2AR.

WALES Department of Agricultural Economics, Institute of Rural Science, University College of Wales, Penglais, Aberystwyth Dyfed SY23 3DD.

LEEDS AND ASKHAM BRYAN COLLEGE LEEDS Agricultural Economics Department, University of Leeds, Leeds. LS2 W.T.

ASKHAM BRYAN Department of Management, Askham Bryan College of Agriculture Askham Bryan, & Horticulture, York.

37.