QMS mentors could earn £17,000 more by living on subsidy cheque

A FINANCIAL reality check on keeping livestock under current costings and current end prices has been delivered to Johnnie Mackenzie and step-son, Gary Elder, who run Westfield, near Thurso.

As the most northerly farm in Scotland taking part in Quality Meat Scotland's monitor farm programme, they were astounded to discover that they would have been 17,000 better off if they sold their cows and just sat back and took the subsidy cheque.

Making the financial losses all the more significant on a Scottish livestock industry basis is the performance of Westfield's suckler herd compared well to similar extensive holdings in Scotland.

The farm's gross margin after forage was 257.71 per cow, compared with the Scottish average of 207.

Mackenzie and Elder knew their enterprise was not making a profit on its own but were taken aback by the scale of their dependence on the subsidy

However, the pair have no intention of joining the so-called slipper brigade as those who have opted out of active production are described.

Instead they are now analysing their costs and the breakdown of their performance figures to see where savings and improvements can be made on their 249 strong suckler herd.

Elder admitted the size of the unsubsidised bottom-line loss made by their cattle had been a bit of a bolt from the blue.

"I think we all know that without subsidies, the business wouldn't really work. You see the headline figures on a national level but it's different when it's set out in black-and-white for your own farm."

They have recently invested in a major upgrading of the steading on the 223 hectare holding, west of Thurso. This has included a new slurry system and further improvements are in the pipeline.

Among issues they are considering is whether to sell older, less productive cows and keep on more of their heifer replacements. They have also started to address their prolonged calving period which this year started in late February and has only just ended.

While they see some scope in opting for earlier calving, they have to weigh up the projected rise in output against the extra cost of using more concentrates.

It was not so cut-and-dry for the business on the sheep front. Their 448-ewe North Country Cheviot flock fared particularly well when set against the performance of other similar producers.

Even with slightly higher than average fixed costs, it recorded a net return of 17.38 per ewe.This was over 2 per head higher than the average of the top third of Scottish upland flockmasters.

The sheep operation, which is based on rented grazings, made a profit of 7,786.24, which grew to 17,091 when subsidy was added.

However, both were aware that the relatively rosy picture for sheep is largely due to the current decent market returns for store lambs.

"Not so long ago you could hardly give them away. But lamb prices have been on the rise over the last couple of years which has a lot to do with so many people having gone out of sheep," said Elder.

Monitor farm facilitator Iona Cameron said: "The figures indicated that Westfield is above average financially though there were a few things they need to address performance-wise."