So far this year store prices have been largely in line with the five-year average, according to AHDB, at £57/head.

Meanwhile, lambs finished in the back end have averaged around £70-£77/head for the last five years.

This is leaving around £20/head to cover costs and profits.

The difference between buying and selling lambs leaves little profit, according to AHDB’s stocktake reports.

It suggests that the cash-only costs for finishing a lamb amount to £15/head, plus an additional £5/head for non-cash costs such as depreciation for mid-performing enterprises.

The top performers, however, are able to squeeze a profit from the £20/head margin. The key differences between the middle and top performers are:

  • Unpaid labour is half that of the mid-performing enterprises.
  • Lower feed and forage costs.
  • Lower purchase prices and higher selling prices.

    • ADHB also notes that output alone is not a good measure of productivity; what matters is the ability to turn inputs into outputs.