🇬🇧 Less is more? Can fewer livestock numbers really mean more profit?

With some governments suggesting that having fewer livestock, particularly ruminants, will help to reduce agriculture’s impact on the environment, how can farmers make the same or more profit with fewer animals?

In 2021, the number of farms across the UK totalled 216,000. They accounted for 17.2 million hectares of land or 71% of the UK’s total land. Dairy and beef are the biggest livestock sectors contributing £4.8 billion and £3.3 billion to the UK economy, respectively. But the average income for a livestock farm is relatively low compared to other sectors. Over recent years there has been a lower output from livestock whilst agricultural input costs have increased by 5%. As a result, farm business incomes fell in the financial year 2022-2023 by up to 41% for grazing livestock to between £21,000 and £25,000.

A quick answer to more profit might be to buy in more livestock and lean towards a more intensive form of agriculture, but that does not have to be the case.

So, is it possible for farmers to make more profit with fewer livestock?

When consultancy firm, Nethergill Associates, conducted a study on 46 farms in upland and marginal areas throughout the UK, their results were surprising. The report suggested farmers needed to focus less on productivity and more on profit margins. Higher stocking rates require more feedstuffs bought in and more fertilisers to improve grassland. For the farms that reduced their stocking rates to a level where only the natural grassland could support them (i.e. without the use of fertilisers) there were significantly increased profits through reductions of variable costs.

So, there are certainly ways in which farmers can reduce their costs and increase their outputs. However, these may require a change in mindset and in farming practices. Big costs to livestock farmers are feed, labour, fertilizer, and fuel. So, by cutting these inputs, farmers can potentially make greater profits. One example is sharing machinery and other resources with neighbours so as to reduce costs for individual farms.

Furthermore, genetics, nutrition and health are the key factors to ensuring maximum efficiency from livestock. If any one of these parameters slips, then productivity and therefore profits are going to start to dip.

Genetics

Breeding plays an important role in what outputs can be achieved. If livestock can reach slaughter weight sooner, then farmers can reduce their inputs and greenhouse gas emissions will be lower over the animal’s lifetime. Different breeds are suitable for different farms and varying climates. Choosing the breed that best suits your farm can improve productivity. Often native breeds fare better in the UK climate.

Animal Welfare

Animal welfare also plays a significant role in highly productive farms. Healthier and happier livestock generally mean greater productivity and lower vet bills. For example, lame lambs or those with a heavy worm burden won’t grow as well. This means that they will require more feed and time to reach slaughter weight, therefore eating into profits. Furthermore, healthier ewes or cows are more likely to produce healthier, more resilient offspring and at regular calving or lambing intervals.

The welfare of livestock can be improved through better housing and nutrition or implementing different farming practices. The pig and poultry sectors have focused on improving feed conversion efficiency over recent years. This has resulted in increased productivity, something that could be applied to cattle and sheep farming.  

Farming Practices

Perhaps the greatest long term change farmers can make is changing their farming practices. With a push for more sustainable farming, some are turning to techniques such as rotational grazing or regenerative grazing. This can reduce the amount of conserved feed that needs to be bought or grown for the animals, reduce labour, and minimize fuel consumption. If done correctly, rotational grazing can increase the amount of time cattle spend out on pasture therefore reducing the need for housing and all the costs associated with that. See our blog Is rotational grazing really the answer?

The land, particularly the soil and grass, can benefit from the natural manure produced by the animals, therefore reducing fertilizer costs. You can incorporate livestock into arable farming systems too as it can help to improve soil nutrition and structure.

Farming in a more environmentally and sustainable way also allows farmers to tap into some of the environmental schemes on offer. Farmers can receive financial benefit for locking carbon away, reducing their insecticide use, and improving soil quality. Another option is diversification. Farmers could reduce their livestock numbers and use the rest of their land for something else. For example, eco-tourism or agroforestry or silvopasture. This provides an alternative revenue stream that may not be subject to fluctuations in agricultural prices.

Is the answer in higher food prices?

Most farmers make more in subsidies than they do from agriculture. Even with all the changes suggested above, many farms will still struggle financially without government support. By increasing food prices, farmers could get more for their products, but this may not sit well with the current cost of living crisis we are all living through. It may also push residents to buy cheaper imported products.

A way of increasing food prices that customers will pay for is by adding value to the product. Many consumers are now conscious about where their food comes from. So, stating local provenance and full traceability is highly sought after. Whilst supermarkets may squeeze their suppliers to turn a profit themselves, there are other avenues for agricultural products that pay more for quality. These include, but are not limited to, farm shops and online artisan meat sales to high net-worth individuals.

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