The British sheep farmers are facing serious difficulties. This is largely due to the falling demand for red meat in the UK and in the EU. Over the last 30 years UK lamb sales have dropped by about 60%. To make matters worse, the price of wool now hardly covers the cost of shearing and over the last 50 years the leather tanning industry has almost reached the point of extinction.
Although British farming as a whole represents less than ½ % of national gross added value, sheep farming is an important rural activity. It is a vital economy because it employs about 35,000 people and a further 10,000 in associated industries.
A further downside factor must be taken into consideration because currently Britain is by far the most important sheep producer in the EU. It exports over 300,000 tons of lamb and mutton a year to the EU worth £1.2 billion UK economy. The total UK flock of sheep is over 30 million which is larger than New Zealand’s flock, although it is only half the size of Australia’s flock.
When we leave the EU, the UK farmers will be facing import tariffs which is bound to reduce its exports to the EU. Will this put most of the sheep farmers out of business? Is there a solution? What can be done to save the U.K.’s farming industry and why is the industry in such a predicament?
The farmers are in this predicament because the sheep industry is divided into the hill, upland and lowland farms, during the season many sheep which are bred on higher ground are either transferred to or sold to farmers on the richer lower land farms, to be fattened for market. Throughout this procedure the farmers are not in any way able influence the price that they receive their lambs. Traditionally, they sold their lambs in the local auction cattle markets. The price depends on the hammer bid at the auction.
The Farmers do not sell lambs early in the season, to be paid for when they reach maturity and they have no control over the price, when they sell their lambs in the local cattle the lamb farmers they accept what they are given because have not created their own marketing organisation and they have not found a different route to the consumer through which they can control their prices.
They (along with many other international sheep farmers) have not embraced or adopted hi- tech software and procedures which enable them to sell to specialist markets around the world where there may be supply shortages.
Therefore, currently those to whom they sell their lambs make that largest share of the profits which is generated by the industry.
The farmers must adapt to modern marketing methods
a) If they don’t do this, they will be relying on Government support and many will go a. out of business.
b) They must re-establish control in the home market.
c) They must expand their EU market aggressively.
d) They must open new markets in the Middle East, The Commonwealth etc.
e) Without an industry plan all will be lost.
f) The farmers collectively must decide to outsource their marketing activities to a marketing company which has the vision and can create the solution in each market which will save their businesses and secure it in the long term.
Businesses only survive and prosper if they make profits. Over 2.5 billion people live in the Middle East and the Commonwealth as compared with the EU which has a population of while 515 million live in the EU.
In the Sheep industry the UK’s main competitors are Australia & New Zealand. They appear to be concentrating their sales efforts on China and Japan and they appear to be withdrawing from the Middle East.
Many Commonwealth countries have GDP growth rates of above 5% per annum. If the UK farmers aggressively market in the UK, the EU, the Middle East and some Commonwealth Markets due to supply and demand the prices will rise and their businesses will thrive.
To succeed they must be brave, they must work together as an industry. There is hope on the horizon.