How Texel system aims for £100 a ewe gross margin

Lowland farmers James and Belinda Kimber predict lower scanning rates and rising costs will pressure margins this year after hitting a gross margin of £155 a ewe in 2021.

The couple at Beanhill Farm, near Chippenham, Wiltshire, capitalised on a strong lamb price last year. But in 2022 the farm is struggling with rising costs and a lower scan result.

The commercial ewe flock is in its seventh year since the business took on rented ground in 2015, increasing the Kimbers’ farmed area by more than 50% to 92ha (228 acres).

See also: Trial finds ewe data is route to bigger lamb cheque

James Kimber © Kathy Horniblow

Previously, the business ran 30 pedigree cows and 130 Texel ewes on the home farm, with Mr Kimber doing foot-trimming five-and-a-half days a week.

This paid for £500,000-worth of infrastructure and equipment on what was a derelict farm. Now foot-trimming is down to two days a week because of the extra work of the commercial sheep enterprise.  

The 550 Texel cross Mules get no subsidy on the rented ground, but do pay a “lowish rent”, says Mrs Kimber.

Farmers Weekly asks how the flock performed last year and what the outlook is for 2022.  

Ewes are fed a soya, maize and grass silage total mixed ration © MAG/Michael Priestley

2021 year in review: income and costs

2021 saw a very high scanning rate, which was not fully realised as lambs sold (see “Output and projected output at Beanhill Farm”).

Reasons for losses

• High scanning was caused by tupping 420 ewes on high-energy forage rape, which resulted in more triplets than twins
• Colostrum top-ups kept weak lambs going in the early stages, but a cold and frosty April challenged them further
• Eventually lost 70 30- to 50-day-old lambs in late April to clostridial challenge because of inadequate colostrum quality

Some costs are lower this year, a result of a range of factors (see “Lower costs at Beanhill Farm in 2022”).  However, this good news is tempered by a lower scanning rate and rising costs in other areas.

• Lower scan A knee-jerk reaction to a high scan last year resulted in 260 fewer embryos this time. Ewes were tupped on old grass leys in the autumn. There were also 100 ewe lambs in the scan, whereas last year all breeding sheep were ewes. Crucially, this limits numbers of lambs sold.
• Miscellaneous Latex gloves were £4.95 a box last year and now cost £17 and silage sheets and some medicines are much dearer. 
• Flock replacement Last year’s income was skewed by culling so many ewes. There is £11,000 of capitalisation because the flock went from 550 to 450 ewes, as original purchase ewes were cashed in after starting the flock by buying over 300 ewes of the same age.

Prognosis

The Kimbers are targeting a conservative gross margin of £100 a ewe for 2022, hoping returns increase when flock size recovers in 2023.

“Looking for positives, the lower scan means bigger lambs, which should be marketed at higher prices and the amount of shearling replacement ewes on farm insulates us from late summer breeding sales,” says Mr Kimber. 

Ewes walking off the farm is vital, he says. Suffolk Mules were bought at £66 apiece to increase numbers, gave four crops and made £140 last year. 

“Given huge uncertainty and volatility, we must be flexible, but producing high conformation, good-quality lambs is the best strategy for our scale. Depreciation isn’t accounted for here, but it’s difficult to know what’s happening. We bought a tractor and three months later we were offered £20,000 more than we’d paid for it – crazy times.”

Outlook for 2022

Some costs are lower this year, a result of a range of factors.