The Value of the Sheep Industry: North East, South West and North West Regions

A report by the Rural Business School at Duchy College

on behalf of the National Farmers’ Union

February 2018

CONTENTS Nlogo here

The Value of the Sheep Industry: North East, South West and North West Regions

CONTENTS

1. Introduction 3 2. Demographics 4 2a. Overview 4 2b. England 4 2c. Regions 5 3. Contribution to the economy 5 3a. Production, consumption, imports and exports 5 3b. Abattoirs 6 3c. Profitability 7 3d. Employment 8 4. Contribution to the environment 9 4a. Land under environmental stewardship 9 4b. Woodland, hedgerows and walls 9 4c. Peatland and moorland 11 4d. Economic value 11 4e. Regional environmental summaries 12 4f. Environmental contribution summary 13 5. Carcase specification and composition 14 6. The structure of the UK sheep industry and regional variation 14 7. The challenges of sheep farming in the uplands 16 8. Conclusion 18 9. References 20 10. Appendices 22 10a. Appendix 1- Sheep Farm Outputs and Costs 22 10b. Appendix 2- South West LFA Case Study Figures with Suppliers 24 10c. Appendix 3- South West Lowland Case Study Figures with Suppliers 26 10d. Appendix 4 –North West Lowland Case Study Figures with Suppliers 28 10e. Appendix 5 – North East LFA Case Study figures with Suppliers 30

The Value of the Sheep Industry: North East, South West and North West Regions

1. INTRODUCTION

The Rural Business School was commissioned by the National Farmers Union to produce a report highlighting the value of the sheep industry to the wider economy, focusing on the three largest sheep producing regions in England. Indeed, the North East including Yorkshire and Humber (NE), the South West (SW) and the North West (NW) represent some two-thirds of England’s sheep production.

Brexit poses a risk to the future of sheep farming, particularly due to the high reliance on the Common Agricultural Policy (CAP) in the form of direct payments and subsidies. It has wide implications for the whole industry, including threatening trade both within and outside of the European Union (EU). Small changes to trade deal tariffs or support payments are likely to disturb market stability, which would have wide implications in terms of percentage swing on domestic supply and net-trade balance.

Through drawing together hard data from various sources, the report gives a snapshot of the breadth and depth of the sheep industry, highlighting its value to both the environment and to the economy. Maintenance of the countryside is key to the environment and tourism, which together with other local and regional businesses in the supply chain, sustain the social fabric of local rural communities across the regions; this is of particular importance in both the upland and more remote lowland areas across all three regions studied.

Businesses both up and down the supply chain depend on a profitable sheep sector and the report underlines the importance of continued support to the sector, be it through market development, regulation, business development or direct measures.

The Value of the Sheep Industry: North East, South West and North West Regions

2. DEMOGRAPHICS

2a. OVERVIEW

The sheep sector is a major contributor to the UK economy, and in 2015 had a national flock of 33,337,000 head of sheep and lambs(1), across 72,272 holdings(2), producing 300,200 tonnes of mutton and lamb(1).

The national flock is made up of lambs one year and under (50%), breeding ewes (48%), and other sheep and rams (2%)(1) averaging 461 head/holding. The structure of the UK sheep industry is not typical of that seen in the rest of the EU, and in 2015, had the largest average flock size. The UK sheep sector is much more consolidated and, unlike other EU member states, has the largest number of holdings with over 500 head of sheep and lambs (26%) in contrast to just 5% of holdings of those sizes in the EU(3).

2b. ENGLAND

A significant proportion of the UK sheep flock is found in England, 15,142,000 (45%), throughout 35,869 breeding ewe holdings, equating to an average flock size of 422(1). Despite less than half of the UK sheep flock residing in England, 66% of total sheep meat production comes from this region(1), which is likely due to stratification (page 14).

Since 2015, the number of sheep in England has continued to grow and has increased from 15.1 million, to almost 15.3 million in 2016, an increase of 0.9%. The female breeding flock has also increased by 0.8% to 7.1 million and the number of lambs increased by 1.0% to 7.8 million in the same period(1,2).

This report primarily investigates three of the five largest sheep producing regions in England; the North East including Yorkshire and Humber (26.7%), South West (20.6%) and North West (19.6%)(4).

Distribution of Sheep in England by Region 2.2%

8.0% North East (inc Yorkshire and Humber) 8.3% 26.7% South West North West

West Midlands 14.6% South East (incl. London)

East Midlands 20.6% East of Engand 19.6%

Figure 1: The proportion of sheep in England in 2015, by region. Source: Defra Statistics: Agricultural facts- commercial holdings at June 2015.

The Value of the Sheep Industry: North East, South West and North West Regions

2c. REGIONS

The majority of published figures concerning the sheep industry are based on a national (UK or England) scale; therefore forthcoming regional figures are an estimation, deduced from the percentage of sheep found in each region, (NE 26.7%, 20.6% SW, 19.6% NW) as a proportion of England, assuming an even stocking rate.

North East

 9,577 sheep holdings  1,884,219 breeding ewes  4,042,914 total head of sheep

South West

 7,389 sheep holdings  1,453,742 breeding ewes  3,119,252 total head of sheep

North West

 7,030 sheep holdings  1,383,172 breeding ewes  2,967,832 total head of sheep

3. CONTRIBUTION TO THE ECONOMY

3a. Production, consumption, imports and exports

The overall value of sheep meat in the UK in 2015 was £2,216m(1). During 2015, the UK produced 300,200 tonnes of sheep meat and offal, exported 83,500 tonnes (£308.5m) and imported 100,500 tonnes (£405.3m), resulting in a net consumption of 317,200 tonnes. At this time, the UK was the largest producer of sheep and goat meat in the European Union, contributing 40% of all meat production(1). Typically, 64% of UK production is consumed domestically and 36% is exported(5). Regionally this amounts to:

North East

 52,626t sheep meat and offal produced  10,130t exported  14,670t imported  57,170t consumed

South West

 40,600t sheep meat and offal produced  7,820t exported  10,050t imported  42,800t consumed

North West

 38,630t sheep meat and offal produced

The Value of the Sheep Industry: North East, South West and North West Regions

 7,450t exported  13,170t imported  44,300t consumed

It is likely that we import more sheep meat and offal than we export due to the seasonality of lamb. Indeed, this is reflected by the source of our imported meat, with 89% of fresh and frozen sheep meat originating from Australia and New Zealand, whose seasons are opposite to ours.

During 2015, the UK also produced more than 28,700 tonnes of wool(5).

Note: Regional import figures are calculated based on human population distribution. For example, assuming consumption is equal across the population, we can deduce that, as 14.6% of England’s population is found in the North East, 14.6% of imported sheep meat and offal will arrive in that region.

3b. Abattoirs

Despite a decrease in the number of abattoirs in England over recent years (Fig. 2), sheep throughput has increased by 8%, indicating an increase in size of existing abattoirs. The predominant sheep abattoir size in England has a throughput of between 1,001-5,000 GLUs per week. However, despite there being fewer large scale abattoirs, their total throughput is significantly higher than the combined total of the smaller abattoirs(1).

Sheep Abattoir Numbers, England, 2012-15

164 162 162

160 159 158 157 156

154

152 152 150 2011 2012 2013 2014 2015 2016 Year

Figure 2: Number of Sheep Abattoirs, England, 2012-15. Source: UK Yearbook, 2016, Sheep.2016.

Interestingly, since 2012, deadweight lamb prices have fallen from an average price of 401.3p/kg in 2012, to 375.8p/kg in 2015, while live weight sheep prices have risen from 64.5p/kg to 65.2p/kg over the same period(1). The former could be due to the vagaries of deadweight reporting, although there are increasingly worries about lack of competition in the red meat sector associated with the consolidation of processing capacity.

The Value of the Sheep Industry: North East, South West and North West Regions

3c. Profitability

The profitability and impact of sheep farming on the wider economy of the three regions was investigated through utilising information from the Farm Business Survey’s 2015/16 dataset of representative grazing livestock farms in each area, together with a series of individual farm mini- case studies. These mini-case studies included farms to analyse expenditure by category and to pinpoint the main destinations of this spend (Appendices 2 & 3). This was augmented by further mini-case studies in the livestock supply industry along with representative farm veterinary practices, agricultural supply businesses and meat processors. Average Value of Sheep and Wool (£/ha) Across Grazing Farm Types (LFA, Lowland and Mixed) 250 200.33 200 168.67 144.33 150

100

0 North East (inc Y & H) North West South West

Figure 3: Average value of sheep and wool output (£/ha) across grazing farm types in North East, North West and South West England. Source: Farm Business Survey, Region Reports, 2015/16.

Farm Business Survey indicate that, when looking solely at grazing farm types (LFA grazing livestock, lowland grazing livestock and mixed farms), the North West region shows the highest output (£200.33/ha), followed by the North East (£168.67/ha) and the South West (£144.33/ha)(6), as shown in Figure 3.

£/ewe South West North East North West LFA LOWLAND LFA LOWLAND LFA LOWLAND Total sheep output 77.07 93.89 102.76 102.08 82.33 98.89 Total variable costs 35.08 49.49 52.86 64.41 47.52 46.16 Gross Margin 41.99 44.39 49.90 37.67 34.81 52.73 Total Fixed Costs 64.28 94.24 81.57 98.92 65.57 90.58 Farmer and Managerial Input 33.63 52.57 17.35 30.25 26.73 30.31 NET MARGIN -55.92 -102.24 -48.66 -91.20 -57.27 -68.17

Table 1. Summary of sheep farm outputs and costs from Farm Business Survey data 2015/161.

1 Full details in Appendix 1.

The Value of the Sheep Industry: North East, South West and North West Regions

A significant part of this difference is because of the relative economic importance of breeding stock sales in the northern areas, particularly in the North West, very much related to the stratification of the sheep industry (Section 6). The pattern is reflected in net margins, after both fixed and variable costs are taken into account (Table 1.)

Currently, in the three regions, all farms failed to make a positive return from sheep production and the contribution from the Basic Payment Scheme and agri-environment schemes represent some 20% of gross income (163% net) in the lowland sheep sector and 33% of gross income (173% net) in the uplands (Fig. 4).

Farm Business Income by Farm Type and Cost Centre, 2015/16

Figure 4: Farm Business Income by Farm Type and Cost Centre, 2015/16. Farm Business Survey 2016.

3d. Employment

In terms of employment, the sheep sector is worth £291.4m to the economy, which equates to 34,000 direct on farm jobs across England and a further 111,405 positions in allied industries(5).

North East

 9,078 direct jobs  29,745 jobs linked to the industry  £77,803,800 contributed to the economy in terms of employment

South West

 7,004 direct jobs  22,949 jobs linked to the industry  £60,028,400 contributed to the economy in terms of employment

North West

 6,664 direct jobs  21,835 jobs linked to the industry  £57,114,400 contributed to the economy in terms of employment

Table 2 shows more detail of the employment in the allied industries.

The Value of the Sheep Industry: North East, South West and North West Regions

Jobs North East South West North West Contractors 1,689 1,303 1,240 Shearing 540 417 397 Veterinary & pharmaceuticals 4,654 3,590 3,416 Machinery dealers & repairers 7471 5,764 5,484 Professional services 1441 1,111 1,057 Financial services 362 280 266 Animal feed & agricultural supplies 3,760 2,901 2,760 Estate agents 200 154 147 Processors & retail 7,203 5,557 5,287 Other 2,426 1,871 1,780 Total 29,745 22,949 21,835

Table 2. A breakdown of jobs within allied industries.

4. CONTRIBUTION TO THE ENVIRONMENT

4a. Land under environmental stewardship

According to Defra’s “Agriculture in the United Kingdom 2015” report(7), 5.13m hectares of land in England are covered by the Entry Level Scheme (ELS) of Environmental Stewardship. Using Defra figures to calculate the proportion of the utilised agricultural area that is used for sheep production, and assuming an even distribution of environmental benefit across the country, we can estimate that this is equivalent to the following levels of ELS on land used for sheep production regionally:

 North East: 182,186 hectares  South West: 107,259 hectares  North West: 104,180 hectares

There are over 1.3m hectares of land in England under the Higher Level Scheme (HLS)(7), which equates to the following regional figures for land used for sheep farming under HLS:

 North East: 47,712 hectares  South West: 28,090 hectares  North West: 27,283 hectares

4b. Woodland, hedgerows and walls

A House of Commons research briefing paper on tree planting in the UK states that in 2015, almost 9,000 hectares of woodland area were planted or restocked in England(8). Using Defra figures to calculate the proportion of the utilised agricultural area that is used for sheep production, and assuming an even distribution of environmental benefit across the country, we can estimate that this is equivalent to the following levels of woodland area planted or restocked on land used for sheep production regionally in 2015 alone:

 North East: 312 hectares  South West: 184 hectares  North West: 179 hectares

The Value of the Sheep Industry: North East, South West and North West Regions

In the five years to 2016, the total woodland area planted or restocked in England was 33,500 hectares. We can therefore estimate that the sheep industry had the following regional contributions:

 North East: 1,189 hectares  South West: 700 hectares  North West: 680 hectares

Defra figures also show that 30,000 km of hedgerows have been planted or restored under agri- environment schemes in England (2005-2014)(9), which equates to the following estimated regional levels on land used for sheep production:

 North East: 1,065 km  South West: 627 km  North West: 609 km

This is the equivalent of the hedgerows planted or restored on sheep-grazing land in the North East stretching from Plymouth to Inverness, or in the South West, laid end-to–end the hedges would stretch from Penzance to Blackpool and in the North West, this would be the equivalent of hedges stretching from Carlisle to Dover.

Andrea Leadsom is quoted(8) as saying in the House of Commons that agri-environment schemes have resulted in the planting of more than 11 million trees in the five years to 2016. Assuming an equal planting rate across all sectors and across all regions, this could equate to the following trees being planted by the sheep sector regionally:

 North East: 390,500 trees  South West: 229,900 trees  North West: 223,300 trees

The most recent data available on stone walls under stewardship schemes appears to be from 2009. The Natural England report(10) states that of the 82,000 km of stone walls in England in 2007, 18,021 km were maintained under ELS as of 2009. Assuming an even distribution of uptake across the country, we can estimate that this is equivalent to the following regional figures on land used for sheep production:

 North East: 640 km  South West: 377km  North West: 366 km

The report(10) also states that 2,232 km of stone walls were restored or created, which is 3% of the total England figure. We can therefore estimate the following regional figures for stone walls restored or created on land used for sheep production:

 North East: 79 km  South West: 47 km  North West: 45 km

Note: In reality, the proportion of stone walls may be higher in the Northern regions.

The Value of the Sheep Industry: North East, South West and North West Regions

4c. Peatland and moorland

A 2011 review(11) commissioned by the IUCN UK Peatland Programme’s Commission of Inquiry on Peatlands, states that in the 2008/09 financial year, there were 150 hectares of lowland raised bog covered by HLS agreements in England. Using the estimation of land used for grazing sheep, and assuming an even distribution of environmental benefit, the following regional levels of lowland raised bog under HLS can be estimated:

 North East: 5.3 hectares  South West: 3.1 hectares  North West: 3.1 hectares

The report(11) also stated that there were: 777 hectares of reed bed under HLS agreements in England; over 33,000 hectares covered by moorland management HLS agreements; and over 85,000 hectares covered by moorland restoration HLS agreements. The following regional levels can therefore be estimated:

Reed bed under HLS(11):

 North East: 27.6 hectares  South West: 16.2 hectares  North West: 15.8 hectares

Moorland management HLS agreements(11):

 North East: 1,173 hectares  South West: 691 hectares  North West: 671 hectares

Moorland restoration HLS agreements(11):

 North East: 3,022 hectares  South West: 1,779 hectares  North West: 1,728 hectares

4d. Economic value

A report by Development Economics commissioned by the National Farmers Union in February 2017(12), estimated the value of the net environmental benefits of habitat and species protection services of UK agricultural services at £672m (2015 prices). The same report valued the contribution made to the UK economy by agriculture in terms of managing the countryside for recreational use by UK residents at just over £19bn and £2bn for overseas visitors. The report also estimated the value of carbon sink services by the UK agricultural industry at £514m.

Using Defra figures to calculate the proportion of the utilised agricultural area that is dedicated to sheep production, and assuming an even distribution of environmental benefit across the country, we can estimate that this is equivalent to the following regionally economic contributions:

Habitat and species protection:

 North East: £11.63m  South West: £6.85m  North West: £6.65m

The Value of the Sheep Industry: North East, South West and North West Regions

Countryside use for recreation by UK residents:

 North East: £330.12m  South West: £194.64m  North West: £188.91m

Countryside use for recreation by overseas visitors:

 North East: £34.6m  South West: £20.4m  North West: £19.8m

Carbon sink services:

 North East: £8.89m  South West: £5.24m  North West: £5.09m

4e. Regional environmental summaries

It is estimated that the sheep industry in the NORTH EAST provides/has provided:

 182k hectares of land managed under ELS (per annum, 2015 data)  48k hectares of land managed under HLS (per annum, 2015 data)  312 hectares of newly planted or restocked woodland (per annum, 2015 data)  1,189 hectares of newly planted or restocked woodland (five years to 2016)  1,065 km of newly planted or restored hedgerows (2005-2014)  391k trees planted (five years to 2016)  640 km of stone walls maintained under ELS (2009)  79 km stone walls restored or created (2009)  5.3 hectares of lowland raised bog under HLS agreements (2008/09)  27.6 hectares of reed bed under HLS agreements (2008/09)  1,173 hectares under moorland management HLS agreements (2008/09)  3k hectares under moorland restoration HLS agreements (2008/09)  Contributed £11.63m to the UK economy in terms of habitat and species protection (2015 prices)  Contributed £330.12m to the UK economy in terms of countryside use for recreation by UK residents (2015 prices)  Contributed £34.6m to the UK economy in terms of countryside use for recreation by overseas visitors (2015 prices)  Contributed £8.9m to the UK economy in terms of carbon sink services (2015 prices).

It is estimated that the sheep industry in the SOUTH WEST provides/has provided:

 107k hectares of land managed under ELS (per annum, 2015 data)  28k hectares of land managed under HLS (per annum, 2015 data)  184 hectares of newly planted or restocked woodland (per annum, 2015 data)  700 hectares of newly planted or restocked woodland (five years to 2016)  627 km of newly planted or restored hedgerows (2005-2014)

The Value of the Sheep Industry: North East, South West and North West Regions

 230k trees planted (five years to 2016)  377 km of stone walls maintained under ELS (2009)  47 km stone walls restored or created (2009)  3.1 hectares of lowland raised bog under HLS agreements (2008/09)  16.2 hectares of reed bed under HLS agreements (2008/09)  691 hectares under moorland management HLS agreements (2008/09)  1.78k hectares under moorland restoration HLS agreements (2008/09)  Contributed £6.85m to the UK economy in terms of habitat and species protection (2015 prices)  Contributed £194.6m to the UK economy in terms of countryside use for recreation by UK residents (2015 prices)  Contributed £20.4m to the UK economy in terms of countryside use for recreation by overseas visitors (2015 prices)  Contributed £5.2m to the UK economy in terms of carbon sink services (2015 prices).

It is estimated that the sheep industry in the NORTH WEST provides/has provided:

 104k hectares of land managed under ELS (per annum, 2015 data)  27k hectares of land managed under HLS (per annum, 2015 data)  179 hectares of newly planted or restocked woodland (per annum, 2015 data)  680 hectares of newly planted or restocked woodland (five years to 2016)  609 km of newly planted or restored hedgerows (2005-2014)  223k trees planted (five years to 2016)  366 km of stone walls maintained under ELS (2009)  45 km stone walls restored or created (2009)  3.1 hectares of lowland raised bog under HLS agreements (2008/09)  15.8 hectares of reed bed under HLS agreements (2008/09)  671 hectares under moorland management HLS agreements (2008/09)  1.73k hectares under moorland restoration HLS agreements (2008/09)  Contributed £6.65m to the UK economy in terms of habitat and species protection (2015 prices)  Contributed £188.91m to the UK economy in terms of countryside use for recreation by UK residents (2015 prices)  Contributed £19.8m to the UK economy in terms of countryside use for recreation by overseas visitors (2015 prices)  Contributed £5.1m to the UK economy in terms of carbon sink services (2015 prices).

4f. Environmental contribution summary

It is therefore evident that the sheep industry in the UK, and within the North East, South West and North West regions of England, makes a significant contribution to the environment, both in terms of delivering environmental services and also in the associated financial contribution to the UK economy. The fact that sheep are common in upland systems, with over 40% of UK breeding flock found in upland and hill farming systems(5), which may be more likely to be under HLS agri- environment schemes, may mean that the above calculations are slightly under-estimated. For example, according to the Moorland Association(13), upland peatland and peat soils are some of the

The Value of the Sheep Industry: North East, South West and North West Regions largest stores of carbon in the UK, making up 42% of the total, in addition, more carbon is stored in UK peat than in the forests of the UK and France combined.

Research by the Macaulay Land Use Research Institute in Aberdeen(14) suggests that song birds prefer the mosaic of habitats that sheep grazing provides and are present in higher numbers in areas grazed by sheep. In addition, grazing by sheep plays an important role in the management of the uplands and ensures they remain accessible and visually as the public have come to expect. Bracken is a dominant monoculture, which can smother ecologically important habitats and negatively impacts on heather. Its spread can be controlled through the trampling effect of sheep feet and in the absence of grazing or burning, heather moor will quickly revert to scrub woodland. Therefore the financial contribution that sheep make to tourism by maintaining our iconic upland landscapes may be even more significant than stated. It should, of course, also be noted that responsible management of the uplands is required, with overstocking capable of detrimentally affecting the ecology of the uplands, and knock-on effects to other species such as grouse and wading birds.

5. CARCASE SPECIFICATION AND COMPOSITION

Currently, under EU legislation, the UK uses the common EU beef carcase classification system known as the EUROP grid. This is common language for the exchange of price information across the EU and forms the basis of domestic cattle purchase pricing mechanisms, with the ‘base price’ reflecting a point on the grid and premiums/penalties paid for deviations from the base point. In Great Britain, in 2015, out of 146,424 sheep carcases sampled at a rate of 1 in 25, 56.8% reached the target specification (E, U or R confirmation and 1, 2 or 3L fatness), 26.8% were too fat (3H or fatter but of adequate conformation) and 16.3% achieved poor confirmation (O or worse). In England in 2015, 73.1% of lamb carcases reached the target fat class of 1, 2 or 3L and 77.3% achieved E, U or R conformation class.

There has been considerable discussion on the relevance of the EUROP grid in communicating consumer and retailer demands and increasingly the need to move rewards to consumer-based outcomes such as meat quality has been identified. The current system places price incentives on the wrong parameters and does not reflect market needs. Furthermore, although there are many benefits from the stratified UK Sheep production system (Section 6), the nature of the system means that hill breeds with poorer confirmation still enter the supply chain.

There is undoubtedly a clear need to address these challenges i.e. a requirement for more transparency further down the food chain in terms of encouraging a greater proportion of product to meet market specification through price incentives. In practice, a comprehensive review of price and grade reporting protocols is needed so that changes are made to assessment methods that would result in better reporting of carcase size, appearance and eating quality. This would allow producers to exploit market opportunities, which would benefit all those involved in the food chain including consumers.

6. THE STRUCTURE OF THE UK SHEEP INDUSTRY AND REGIONAL VARIATION

The topography and landscape of the United Kingdom has led to the development of a stratified system of sheep production, split between hill, upland (or marginal) and lowland farms, with an interdependence across all three. This system of stratification is unique to the UK and is a practical and environmentally sustainable way of making the most of the different environmental conditions

The Value of the Sheep Industry: North East, South West and North West Regions and breeds. Historically, each system has been very dependent on the other two; however, changes in market requirements and subsidy support means that this may no longer be quite so significant. This stratification is summarised in Figure 5.

Figure 5: The Stratification of the UK sheep industry. Reproduced from the Agricultural Notebook (20th Edition), R. Soffe

Hill farms

The climate and topography of hill farms result in a harsh farmed environment, with a limited grass- growing season, which is usually limited to, or dominated by, indigenous herbage species. The ability to conserve forage for winter feeding is almost non-existent. The sheep tend to be small, hardy, purebred hill breeds, physiologically suited for the conditions, able to rear lambs efficiently, whilst maintaining their own body condition on low inputs and relatively low quality vegetation. However, the harsh conditions mean that ewes often cannot thrive beyond four seasons, so ewe lambs are kept as replacements and the older ewes are drafted out to upland farms, where the more

The Value of the Sheep Industry: North East, South West and North West Regions favourable conditions ensure they have several more years of productive life. The sale of these drafted ewes are an important income for hill farmers, as is the sale of male lambs, the majority of which are sold as stores, to be finished on lowland farms. The uplands have a disproportionate amount of livestock markets in comparison with lowland areas, which reflect this stratified system of production, and hill farms are dependent on the market for their store lambs and draft ewes. However, even with these sales, they vast majority only remain financially viable due to the presence of subsidies and direct support.

Upland farms

Upland farms may not actually be lower than the hill farms, but they do tend to have flatter fields and a better climate, which allows for cultivations, sward improvement and inputs such as fertiliser and lime. This also allows for the conservation of forage, such as silage for winter feeding, which results in a higher lambing percentage (130-140% compared to 100% on hill farms). The drafted ewes bought in from the hills are bred with longwool breeds, such as the Teeswater, which results in increased performance through hybrid vigour. The ewes from these crosses have potential lambing percentages of 200%, with better milk production, and are in much demand from lowland farms, which is an important income source for upland farmers. One of the most typical of these crosses is between a Blue-faced Leicester and a Swaledale, which results in a Mule.

Lowland farms

The majority of lambs for slaughter are finished in lowland flocks. Lowland farmers tend not to breed their own replacements, instead buying them from upland farms. Terminal sires are therefore used to improve carcase conformation, and lambing percentage targets are around 200%. The more favourable climate in the lowlands allows for a longer lambing period, with some early lambing flocks starting to lamb as early as December or early January.

Some lambs on lowland farms will be finished off pasture alone; however, many will still be on the farm at the end of summer and will require a period of finishing on conserved forage, cereals or root crops. Around half of these lambs will be finished before Christmas, with the remainder being sold as “hoggets” the following spring.

7. THE CHALLENGES OF SHEEP FARMING IN THE UPLANDS

The uplands of the UK are semi-natural habitats that have been formed by generations of agricultural enterprise, much of which has been shaped by grazing livestock. The regions of the North East, North West and South West England, the focus of this report, include a large proportion of the upland areas of England. The uplands are unique in many ways: the climate is varied and often extreme, they are mostly at high altitude (with some of the uplands of the South West being an exception) and they are remote. They play a key role in the sheep industry of the UK, providing breeding stock and store lambs for lowland farms (see Structure of the UK sheep industry on page 14), as well as finished lambs and wool.

Farming in the uplands suffers from the same difficulties as farming in the lowlands, but in addition, is subject to a range of specific challenges, which result in the uplands being a difficult place to make a living. The higher altitude, more extreme climate, shorter growing season, topography and low soil fertility all add to the complexities of farming here. The land is marginal, with limited options for what it can be used for, and there is often no one else in the supply chain to pass increasing input costs on to, thus leaving them very vulnerable to price fluctuations.

The Value of the Sheep Industry: North East, South West and North West Regions

Data show that the average income for an upland farm in 2010/11 was £31,000, compared to an average income of £61,000 for a lowland enterprise(15). More recent Farm Business Survey (FBS) data from 2015/16(16) indicates that the average Less Favoured Area (LFA) grazing farm makes an Agricultural Business Income loss of -£10,771 (before unpaid labour) from crop and livestock production, per farm. Once the unpaid labour has been taken into account, this loss increases to an Agricultural Corporate Income loss of -£34,969.

Basic Payment Scheme (SPS) and agri-environment payments make up close to 173%(16,17) of the Total Farm Business Income and it is recognised that without these payments, many businesses would be making a substantial loss and would not survive. This dependence on support payments puts the upland farming industry in a very vulnerable position post-Brexit. A report(18) on the challenges facing farmers in the uplands, funded by Oxfam, Rose Regeneration and Upper Teesdale Agricultural Support Services Ltd., found that one in four farming families were living in poverty, with those struggling likely to be from grazing upland farms.

Farming in the uplands has been in a period of prolonged economic pressure for a number of years, with consistently low levels of profitability and the aforementioned dependency on agricultural and environmental payments, although other factors such as decreasing livestock prices, currency variations and increasing input costs have also been implicated. The decline is often linked to the reform of the Common Agricultural Policy and the decoupling of support payments from a system based on number of animals (the so-called “headage payments”) to one based on holding size. This was further complicated in the uplands with the large swathes of common land, where many farmers were not allocated the correct entitlements or told they could not claim at all.

A 2011 House of Commons “Farming in the Uplands”(19) report quotes the South West Uplands Federation as saying the introduction of the SPS removed “the incentive to farm the moorland” and resulted in a reduction in cattle and sheep numbers in the uplands. Dartmoor National Park Authority went on to cite research by the University of Exeter and Duchy College in 2008 that identified SPS as the main cause of the decline of the economic viability of hill farms in South West England.

Environmental damage to the uplands can be caused by both too few and too many grazing livestock. Care therefore needs to be taken to ensure that any future subsidies secure both the environmental and financial sustainability of the uplands, with many arguing that ideal stocking levels should be looked at on a regional basis – a “one-size fits all” approach to stocking densities does not reflect the variability in the upland areas across the country, and risks both detriment to the environment and land abandonment through loss of profitability.

In addition to the difficulties of climate and geography, the difficulties of farming in the uplands are compounded by matters such as the high levels of farm tenancy in these areas and a high level of private and institutional ownership by landlords who let out to tenant farmers. According to a report by the NFU Hill and Upland Farming Group(15), 48% of the land on LFA farms is owner-occupied, 47% is rented on tenancies of one year or more and the remaining five percent is rented for less than a year.

In the House of Commons “Farming in the Uplands” report(19), the NFU is quoted as saying, “The marginal viability of uplands farms creates succession issues. Although 37% of upland farmers have succession secured, it is questionable for the majority. 21% of upland farms are not expected to continue beyond the next five years. We believe that financial uncertainty is critical to determine

 Net

The Value of the Sheep Industry: North East, South West and North West Regions family members’ decisions to take on and invest in hill farms”. In addition, tenant farmers can find it harder to take out loans due to their lack of collateral, which can reduce options for diversification.

In 2009, 56% of LFA farms had diversified into other farm-based or non-farm income, however, diversification on upland farms was found to be around 10% less than on lowland farms(15). Evidence suggests that there is less scope to diversify on upland farms due to their remote location, sparse population and lack of associated infrastructure. An increase in the availability of high speed broadband in rural areas would help to ameliorate this to some extent.

It should also be noted that upland farming communities tend to be an aging population and their long term viability is dependent on attracting young entrants to the industry. However, the National Sheep Association do report an increase in interest in sheep farming by young farmers, partly related to the relatively low start-up capital costs. Methods to attract young entrants to the uplands, such as the availability of affordable housing needs to be a priority.

However, the unique features of the uplands do provide opportunities as well as challenges, such as their high nature value and opportunities to benefit from any future move towards subsidies based on environmental services and public goods. The realisation of the true economic value that the uplands provide in terms of biodiversity preservation, carbon sinks, flood mitigation, water purification and recreation is crucial to the long-term economic sustainability of farming in these regions.

8. CONCLUSION

The three regions investigated, the North East (including York and Humber), the South West and North West are home to 68% (27%, 21% and 20% respectively) of England’s sheep, totalling 4.8 million head across 24,000 sheep farming enterprises. Total sheep meat produced in the three regions is 91,000 tonnes (36k, 28k and 27k respectively) with a value of £673 million. Nearly 30% of production is exported (25,300 tonnes), 95% of which is to the European Union, whilst 33% of consumption is imported, mainly from New Zealand (74% of imports). Wool generates an additional £7.2m per annum. The value to the wider economy is reflected in the value of supply chain employment calculated as £195m across the three regions.

The importance of sheep production to the environment across the North East, South West and North West is demonstrated, both in terms of delivering environmental services and in the associated financial contribution to the regional economies. Across the three regions, sheep production was associated, for example, with the planting of some 608,000 trees, and 1,659 km of hedgerows (see Table 3 for details). It is estimated that the sheep sector contributed £18.1m/year to the economy in terms of habitat and species protection, £567.2m/year in countryside use for recreation and £13.9min terms of carbon sink services (all in 2015).

Currently, in the three regions, support including the Basic Payment Scheme and agri-environment schemes represent some 20% of gross income (163% net) in the lowland sheep sector and 33% of gross income (173% net) in the uplands. Thus the implications of Brexit constitute a threat in the form of the potential reduction or complete removal of the direct ‘Pillar1’ subsidies; even if these were partially replaced by agri-environment payments, their removal would be a serious threat to the viability of the sheep sector. Exports are important to the sector, not only in volume terms, but also in addressing higher supply of sheep meat at certain times of the year, and imbalances in demand for different cuts (e.g. UK preference for legs and minimal domestic demand for offal and skins). With 95% of exports going to EU countries, the likely effects of Brexit are clearly a threat to

The Value of the Sheep Industry: North East, South West and North West Regions the sector, not only through reduced ‘Pillar 1’ payments, but also through lowered prices due to increased domestic supply, if EU export demand is curbed.

Category North East South West North West Percent of England's Sheep 27% 21% 20% Number of Sheep Farms 9.6k 7.4k 7k Breeding Ewes 1.9m 1.5m 1.4m Total Sheep 4m 3.1m 3m Sheep Meat Produced (t) 36,000t 28,000t 27,000t Sheep Meat (£) £268m £207m £198m Wool (£) £2.9m £2.2m £2.1m Direct Jobs 9,100 7,000 6,700 Supply Chain Employment (£) £78m £60m £57m Sheep Exports (t) 10,100t 7,800t 7,400t Sheep Exports (£) £37.4m £28.9m £27.5m Habitat and Species Protection £7.9m £5.6m £4.6m Countryside Use for Recreation £225.2m £158.4m £129.8m Carbon Sink £6.1m £4.3m £3.5m Trees Planted 267k 188k 153k Hedgerows 729km 513km 417km

Table 3. Key sheep associate figures from the North East, South West and North West Regions of England.

Key to addressing the challenges, is a need for more transparency further down the food chain in terms of encouraging a greater proportion of product to meet market specification through price incentives; at the same time, producers should be encouraged to develop their business models on a margin-driven basis, encompassing innovation, product quality and consistency to exploit this opportunity.

The Value of the Sheep Industry: North East, South West and North West Regions

9. REFERENCES:

1. UK Yearbook, Sheep. 2016. Agriculture and Horticulture Development Board. http://beefandlamb.ahdb.org.uk/wp-content/uploads/2016/07/UK-Yearbook-2016-Sheep- 050716.pdf 2. UK Yearbook, Sheep. 2017. Agriculture and Horticulture Development Board. http://beefandlamb.ahdb.org.uk/wp-content/uploads/2017/07/UK-Yearbook-2017- Sheep.pdf 3. More Sheep on Fewer Holdings in the EU in 2013. 2016. Agriculture and Horticulture Development Board. http://beefandlamb.ahdb.org.uk/market-intelligence-news/more- sheep-on-fewer-holdings-in-the-eu-in-2013/ 4. Defra Statistics: Agricultural Facts. England Regional Profile. January 2017. https://www.gov.uk/government/statistics/agricultural-facts-england-regional-profiles 5. National Sheep Association, Sheep Facts [ONLINE] http://www.nationalsheep.org.uk/know- your-sheep/sheep-facts/ 6. Farm Business Survey [ONLINE] http://www.farmbusinesssurvey.co.uk/regional/ 7. Agriculture in the United Kingdom 2015, Defra: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/557993/A UK-2015-05oct16.pdf 8. “Tree planting in the UK” Debate pack Number CDP 1016/0241 2nd December 2016. Sara Priestley and Nikki Sutherland. House of Commons Library. http://researchbriefings.files.parliament.uk/documents/CDP-2016-0241/CDP-2016-0241.pdf 9. “New environmental scheme for farmers to prioritise biodiversity”. Press release 26th February 2014. Defra and George Eustice MP. https://www.gov.uk/government/news/new- environmental-scheme-for-farmers-to-prioritise-biodiversity 10. “Agri-environment schemes in England 2009. A review of results and effectiveness”. Natural England http://www.google.co.uk/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&ved=0ahUKEwj_r- rBhvjXAhUHXRQKHcVPA1kQFggwMAA&url=http%3A%2F%2Fpublications.naturalengland.or g.uk%2Ffile%2F107014&usg=AOvVaw1lnRk7FSARU41wK_P_KnzO 11. “Review of public funding of peatland management and restoration in the UK” Clunie Keenleyside and Andrew Moxey May 2011 http://www.iucn-uk- peatlandprogramme.org/sites/www.iucn-uk- peatlandprogramme.org/files/Review%20Public%20Funding%20of%20Peatland%20Manage ment%20and%20Restoration,%20June%202011%20Final.pdf 12. “Contributions of UK Agriculture”. Development Economics February 2017 https://www.nfuonline.com/assets/93419 13. The Moorland Association http://www.moorlandassociation.org/carbon-capture/ 14. Irvine, R.J. (ed) 2011. Sustainable Upland Management. A summary of research outputs from the Scottish Government’s “Environment- Land Use and Rural Stewardship” research programme. Macaulay Land Use Research Institute, Aberdeen. Cited here: http://www.nationalsheep.org.uk/workspace/pdfs/02649-lfa-report-digital.pdf 15. “The NFU Hill and Upland Farming Group – our commitment to the hills and uplands” NFU https://www.nfuonline.com/assets/4815 16. “A Summary from Hill Farming in England” Farm Business Survey 2015/16. David Harvey and Charles Scott. March 2017 http://www.ruralbusinessresearch.co.uk/publications/

The Value of the Sheep Industry: North East, South West and North West Regions

17. “Lowland Grazing Livestock Production in England” Farm Business Survey 2015/16. Mark Fogerty, Richard Soffe and Keith Robbins. March 2017 http://www.ruralbusinessresearch.co.uk/publications/ 18. “Challenges Facing Farmers - a report into upland farming and farming families in Teesdale” Oxfam 2012 https://policy-practice.oxfam.org.uk/publications/challenges-facing-farmers-a- report-into-upland-farming-and-farming-families-in-249113 19. “Farming in the Uplands – Third Report of Session 2010-11” House of Commons Environment, Food and Rural Affairs Committee, Volume 1.

The Value of the Sheep Industry: North East, South West and North West Regions

10. APPENDICES

10a. Appendix 1: Sheep Farm Outputs and Costs from Farm Business Survey Data, 2016. Rural Business School, 2017.

South West North East North West LFA LOWLAND LFA LOWLAND LFA LOWLAND Number of farms 29 89 40 30 61 34 Average farm size (UAA) ha 127.20 121.18 289.25 175.56 151.11 125.16 Ewe Numbers 402.04 234.51 658.90 302.57 446.32 290.42

Sheep output (£/ewe)

Livestock depreciation -12.81 -13.74 -14.63 -21.60 -12.62 -14.13 Wool 3.02 3.02 2.81 3.19 1.95 3.04 Finished livestock sales 46.12 83.47 87.55 108.99 56.27 95.25 Store lamb output 20.37 3.37 4.19 -2.21 8.44 -2.26 Other (excluding purchases and transfers in) 20.37 17.49 22.84 13.71 28.17 16.99 Total sheep output 77.07 93.89 102.76 102.08 82.33 98.89

Variable Costs (£/ewe) Concentrate (horses, cattle, sheep and goats) 12.60 15.82 21.82 22.34 17.86 19.83 Fodder 1.01 1.16 1.35 1.55 6.27 1.87 Vet. and medicine 5.55 9.23 7.97 9.43 7.41 6.56 Other livestock costs 9.29 13.47 13.19 15.88 10.08 11.30 Seeds 0.33 1.51 0.65 1.19 0.12 0.73 Fertilisers 5.68 6.81 6.58 11.95 4.75 4.86 Crop protection 0.24 0.50 0.43 0.75 0.32 0.57 Other crop costs 0.39 1.00 0.87 1.30 0.72 0.44 Total variable costs 35.08 49.49 52.86 64.41 47.52 46.16

GROSS MARGIN 41.99 44.39 49.90 37.67 34.81 52.73

The Value of the Sheep Industry: North East, South West and North West Regions

South West North East North West

LFA LOWLAND LFA LOWLAND LFA LOWLAND

Fixed Costs (£/ewe)

Wages 14.58 21.21 23.23 29.63 16.42 23.56 Contract work 4.33 4.69 5.88 3.16 2.78 4.69 Machinery 21.44 25.93 21.85 23.48 22.98 25.95 Electricity 0.83 1.40 0.40 0.99 0.80 1.37 Water 0.55 0.71 0.50 0.54 0.32 0.95 Insurance 3.16 5.03 3.40 4.09 3.17 4.58 Bank charges 0.62 0.84 0.86 0.74 0.62 0.76 Professional fees 2.16 2.88 2.35 1.94 1.92 2.62 Vehicle tax 0.35 0.39 0.20 0.20 0.31 0.37 Residual heating fuel 0.50 0.50 0.65 0.51 0.16 0.32 Other general farming costs 1.89 2.85 1.59 2.23 1.56 2.02 Total Fixed Costs before Land 50.41 66.43 60.92 67.52 51.04 67.19 Land Costs 13.87 27.80 20.64 31.40 14.54 23.40 Total Fixed Costs 64.28 94.24 81.57 98.92 65.57 90.58

Farmer and Managerial Input 33.63 52.57 17.35 30.25 26.73 30.31

NET MARGIN -55.92 -102.24 -48.66 -91.20 -57.27 -68.17

The Value of the Sheep Industry: North East, South West and North West Regions

10b. Appendix 2: South West LFA Case Study Figures with Suppliers. Farm Business Survey Data, 2016. Rural Business School 2017.

SOUTH WEST LFA Average farm size (UAA) ha 127.20 Ewe Numbers 402.04

Sheep Output £/ewe Supplier Livestock depreciation -12.81 B Jeffries, D Sampson, Evans Bros, Rendells, Wool 3.02 BWMB Finished livestock sales 46.12 Jasper & Son Store lamb output 20.37 Jasper & Son Other (excluding purchases and transfers in) 20.37 Jasper & Son Total sheep output 77.07

Variable Costs £/ewe Supplier Concentrate 12.60 ACT, Dennis Brimicombe, Minsups, Mole Avon, Mole Valley Farmers Fodder 1.01 Vet. and medicine 5.55 Mole Avon, Mole Valley Farmers, North Park Vets, Wessex Medicines Davey Haulage, FarmScan, Mole Avon, Mole Valley Farmers, Oldstone Farm, Other livestock costs 9.29 SAI Global, Shearwell, Wessex Medicines Seeds 0.33 ACT, Mole Avon, Mole Valley Farmers Fertilisers 5.68 Glendinning, Mole Avon Crop protection 0.24 E Tucker & Son, Mole Avon Other crop costs 0.39 Mole Avon, Mole Valley Farmers Total variable costs 35.08

GROSS MARGIN 41.99

The Value of the Sheep Industry: North East, South West and North West Regions

Fixed Costs £/ewe Supplier Wages 14.58 Contract work 4.33 A Chudley, AC & J Bowden Carrs, CJ Saunders, Fry & Son, Livery Dole, M Chamberlain, Mason Kings, Mid- Machinery 21.44 Devon Tyres, Mole Avon , Mole Valley Farmers, Milner Offroad, P Warne, S Baker, SG Equipment Finance, Winston Pincombe Electricity 0.83 EDF Water 0.55 Insurance 3.16 Cornish Mutual, NFU Mutual Bank charges 0.62 Barclays Professional fees 2.16 J Dodd, K. Bateman, Thomas Wescott Vehicle tax 0.35 Residual heating fuel 0.50 Apple, BT, CLA, Dartmoor Commoners, Greenway, Mole avon, Mole Valley Other general farming costs 1.89 Farmers, Police, Post Office, National Sheep Association, RBI, Viking Direct Total Fixed Costs before Land 50.41 Land Costs 13.87 Animal Crackers, Bradfords, Fairway Electrics, Fry & Son, RGB, J Coombs, Mole Avon, Mole Valley Farmers Total Fixed Costs 64.28

Farmer and Managerial Input 33.63

NET MARGIN -55.92

The Value of the Sheep Industry: North East, South West and North West Regions

10c. Appendix 3: South West Lowland Case Study Figures with Suppliers. Farm Business Survey Data, 2016. Rural Business School 2017.

SOUTH WEST LOWLAND Average farm size (UAA) ha 121.18 Ewe Numbers 234.51

Sheep Output £/ewe Supplier Livestock depreciation -13.74 Exmoor Farmers Livestock Auctions Ltd Wool 3.02 BWMB Finished livestock sales 83.47 Jasper & Son, Lifton Lamb, Store lamb output 3.37 Other (excluding purchases and transfers in) 17.49 Total sheep output 93.89

Variable Costs £/ewe Supplier Concentrate 15.82 Harpers Feeds, Maunder & Sons, Tithebarn Fodder 1.16 H Bell, RF Hodge, Vet. and medicine 9.23 Castle Vets, Maunder & Sons, C G Mudge, C Ruby, FD Statton, Fenceline UK, G Robson (shearing) Lewannick Other livestock costs 13.47 Post Office, Markrite, Maunder & Sons, MR Horn, Seeds 1.51 Mole Valley Farmers Fertilisers 6.81 Mole Valley Farmers Crop protection 0.50 Maunder & Sons Other crop costs 1.00

Total variable costs 49.49

GROSS MARGIN 44.39

The Value of the Sheep Industry: North East, South West and North West Regions

Fixed Costs £/ewe Supplier Wages 21.21 Contract work 4.69 FJ Yeo, Halse of Honiton, Harpers Feeds, J Lake, Alan Snow, Autoglass, C & G Machinery 25.93 Autoservice, David Trand, Greenaways Services, Maunder & Sons Electricity 1.40 N Power Water 0.71 South West Water Insurance 5.03 NFU Mutual Bank charges 0.84 Professional fees 2.88 CLA, Hodgsons, NFU, SAI Global, Vehicle tax 0.39 BP, Carr's Garage, Keltic, Moorland Fuels, Shell, ST Lane, Texaco, WM Residual heating fuel 0.50 Morrison, Other general farming costs 2.85 BT, Carr's, Maunder & Sons, Post Office, RBI, ST Lane, Vodafone Total Fixed Costs before Land 66.43 Edmundson Electrical, Fahey's Concrete, F Hughes, Markstone Granite, Land Costs 27.80 Orchard Electrical, Maunder & Sons, Tinhay, T Packman, Ward & Chowen Total Fixed Costs 94.24

Farmer and Managerial Input 52.57

NET MARGIN -102.24

The Value of the Sheep Industry: North East, South West and North West Regions

10d. Appendix 4: North West Lowland Case Study Figures with Suppliers. Farm Business Survey Data, 2016. Rural Business School 2017.

NORTH WEST LOWLAND Average farm size (UAA) ha 125.16 Ewe Numbers 290.42

Sheep Output £/ewe Supplier Livestock depreciation -14.13 Wright Marshall Wool 3.04 BWMB Finished livestock sales 95.25 Wright Marshall Store lamb output -2.26 Other (excluding purchases and transfers in) 16.99 Total sheep output 98.89

Variable Costs £/ewe Supplier Concentrate 19.83 Massey Feeds, Carrs Billington Fodder 1.87

Vet. and medicine 6.56 Mole Valley Farmers, Carrs billington, Fane valley, Chelford FS Other livestock costs 11.30 CH Dakin, NFSCO, Mole Valley Farmers, Chelford FS, Seeds 0.73 Mole Valley farmers Fertilisers 4.86 Mole Valley Farmers Crop protection 0.57

Other crop costs 0.44

Total variable costs 46.16

GROSS MARGIN 52.73

The Value of the Sheep Industry: North East, South West and North West Regions

Fixed Costs £/ewe Supplier Wages 13.56 Contract work 4.69 25.95 Middlewich Plant Hire, Horner Shearing, Micheldever Tyres, Winsford Plant Machinery Hire, Malpas Tractors. PF Jones, Sandbach Motor Factors, Neat Autos, Fleet Factor, Border Plant Sales, Cheshire Bearings, Milner Off Road Electricity 1.37 Opus, Water 0.95 North West Water Insurance 4.58 NFU Mutual Bank charges 0.76 NatWest Professional fees 2.62 CLA, NFU, SAI Global, Murry Smith, Aaron and Partners Vehicle tax 0.37 Residential heating fuel 0.32 Shell, Swan Petroleum, Other general farming costs 2.02 Daisy, Carrs Billington, Post Office, Screwfix, Chelford FS Total Fixed Costs before Land 67.19 23.40 Duttons Builders Merchants, Middlewich DIY, B&Q, Same Dale and Son, Land Costs Cavanagh of Winsford, Jewson Total Fixed Costs 90.58

Farmer and Managerial Input 30.31

NET MARGIN -68.17

The Value of the Sheep Industry: North East, South West and North West Regions

10e. Appendix 5: North East LFA Case Study Figures with Suppliers. Farm Business Survey Data, 2016. Rural Business School 2017.

NORTH EAST LFA Average farm size (UAA) ha 289.25 Ewe Numbers 350 658.90

Sheep Output £/ewe Supplier Livestock depreciation -14.63 Craven Cattle Marts (CCM) Wool 2.81 BWMB Finished livestock sales 87.55 CCM Store lamb output 4.19 CCM Other (excluding purchases and transfers in) 22.84 Total sheep output 102.76

Variable Costs £/ewe Supplier Concentrate 21.82 Calder valley Agriculture(CALVAG) E Swale, Carrs Billington, Agrilloyd Fodder 1.35

Vet. and medicine 7.97 Carrs Billington, Calvag, West Mount Vet, Ainsworth Vet Other livestock costs 13.19 Carrs Billington, Calvag, J Keymer (shearing) I Smith (scanning) Garbutt Seeds 0.65

Fertilisers 6.58 E swale Crop protection 0.43

Other crop costs 0.87 Total variable costs 52.86

GROSS MARGIN 49.90

The Value of the Sheep Industry: North East, South West and North West Regions

Fixed Costs £/ewe Supplier Wages 23.23 R Calvert (cas) Contract work 3.16 R Holroyd 21.85 G Bryan Jones, Guy Machinery, Taylor ATV, JD Ingram, W Brown, Smith Machinery Motors, Moderna, LEW Castings, Allspeeds, K Supplies, Bill Lock, Northern Filters, A-Z Parts. Electricity 0.40 B Gas Water 0.50 Insurance 3.40 Hagerty Bank charges 0.86 Natwest Professional fees 2.35 NFU, Shepard partnership Vehicle tax 0.20 Residential heating fuel 0.65 J Shepard, Brobot, Crags Energy Other general farming costs 1.59 Talk talk, Carr's, Post Office, Screwfix, R Calvert Total Fixed Costs before Land 60.92 Land Costs Mythholroyd Builders, TH Atkins (walling) CALVAG, Screwfix Total Fixed Costs 81.57

Farmer and Managerial Input 17.35

NET MARGIN -48.66