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SITUATION AND OUTLOOK FOR CATTLE & SHEEP 2008/2009. J. Breen, K. Hanrahan, & A. Kinsella Rural Economy Research Centre. Overview of Presentation. Review of 2007 (NFS Data) Situation in 2008 Outlook for 2009 Take Home Message. Situation and Outlook for Cattle 2008/2009.
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SITUATION AND OUTLOOK FOR CATTLE & SHEEP 2008/2009 J. Breen, K. Hanrahan, & A. Kinsella Rural Economy Research Centre
Overview of Presentation • Review of 2007 (NFS Data) • Situation in 2008 • Outlook for 2009 • Take Home Message
Review of 2007 (NFS Data) • Gross Output (Market-based) • Excludes SFP, REPS, Disadvantaged Area • Includes SCWS in 2008 and 2009 • Gross Margin & Net Margin • Therefore excludes SFP, REPS, Disadvantaged Area
Gross Output 2008 • Prices up on 2007 • Ban on Brazilian beef imports • Reduced Supply • R3 Steers up 16% • O3 Cull Cows up 21% • Introduction of the Suckler Cow Welfare Scheme • €80 per cow • Approx 884,000 cows registered
Beef Production Systems • Four Production Systems focused on • SS = Single Suckling • RD = Rearing Dairy Farms • WF = Weanlings to Stores/Finished • SF = Stores to Finished
Gross Output 2008 by Production system Up €95 or 24% on SS 2007 NFS Average, 2008 Estimated
Costs of Production 2008 • 2008 Expenditure versus 2007 • Feedstuffs up 20% • Pasture and forage up 28% • Energy up 20% • All other Inputs up 6%
Gross Margin 2007 and 2008 by Production system 2007 NFS Average, 2008 Estimated
Gross Output 2009 • Average Prices are expected to be largely unchanged compared to 2008 • Suckler Cow Welfare Payment is expected to be lower • €49 per cow assumed
Costs of Production 2009 • 2009 Expenditure versus 2008 • Feedstuffs down 20% • Pasture and forage down 11% • Energy down 10% • All other Inputs up 2%
Gross Margin 2007, 2008 and 2009 by Production system 2007 NFS Average, 2008 Estimated, 2009 Forecasted
Net Margin Per Hectare 2007, 2008 & 2009 All Farms 2007 NFS Average, 2008 Estimated, 2009 Forecasted
Returns to Production • Margin over Direct Costs and Disposable Fixed Costs • Non-Disposable Fixed Costs • Disposable Fixed Costs • Hired Labour • Machinery Operating Expenses • Depreciation of Machinery • Rent of Land
Returns to Production per Ha 2007, 2008 & 2009 All Farms 2007 NFS Average, 2008 Estimated, 2009 Forecasted
Sheep Meat Markets 2007/`08 • Decline in Numbers • Flock Numbers down from 35,300 to 33,700 • Ave Flock Size down from 102 to 97 ewes • Lamb Slaughtering down 13% in Ireland • France down 8% • NZ Lamb Exports down • Expected to fall further by 23% in 2008/09 • Led to higher EU and Irish lamb prices
Mid-Season Lamb - Financial Performance 2007 Average Top 1/3 Source: Teagasc National Farm Survey €/Ha 795 1078 Output Direct Costs 351 331 Gross Margin 444 747
Mid-Season Lamb - Technical Performance 2007 Average Top 1/3 Source: Teagasc National Farm Survey 146 150 Lambing % Weaning % 134 141 Ewes/Ha 8.7 10.9 Kgs Lamb Carcass/Ha 216 284
Quarterly Irish Lamb Prices, 2007-2008 Source: Bord Bia
Gross Margin €/ewe System 2006 2007 2008 1 2009 2 46 55 57 61 Early Lamb Mid-Season lamb 42 51 53 58 Hill-Blackface 4 6 7 7 2007 NFS Average, 2008 Estimated, 2009 Forecasted
Take Home Message • Cattle • 2008 Prices up but a high cost year • Net margin down on 2007 • 2009 Prices unchanged, costs expected to decline • Net margins up on 2007 & 2008 • Overall 2/3’s still have negative net margin • 1/3 have negative net margin when we look at margin over direct and disposable fixed costs
Take Home Message • Sheep • Irish Sheep Numbers/Flock Numbers in Decline • Prices in second quarter were up 18% • Gross Margin per ewe in 2008 up 4% on 2007 • Gross Margin per ewe in 2009 up 8% on 2008