When lamb prices hit rock bottom

Even on a damp, foggy day the views from Colin Bateman's farm in Cumbria are inspiring. From the top of the valley to the bottom there are panoramic views of the Lake District as far as the eye can see. The craggy peaks of the mountains disappear into the low cloud which hangs in the valley.

But the views are the last thing on Colin's mind at the moment. Like thousand of farmers in Britain he's feeling the pinch as a result of foot and mouth restrictions on livestock movement. It means he can't sell his lambs as freely as he would like to and he says that's costing him dearly.

We've come to his farm to spend the day with Colin and his eight sheep dogs. He wants to tell a story of plummeting livestock prices, crippling restrictions and a growing bitterness towards the Government, whom some blame for the outbreak in the first place.

"Many farmers feel that the government could do a lot more to help farmers," says Mr Bateman, who at 37 years old is the youngest farmer in this valley.

"Already I have lost around £10,000 because of the restrictions, and by the end of the year I estimate to have lost £20,000 altogether. That's a big chunk of my profit for the year and money which won't be reinvested for next year. This year is basically a write-off."

He's not the only one writing the year off.

In the hustle of the Kendal auction mart just a few miles from where Colin farms, lamb prices are at rock bottom. Most of the farmers are in their sixties and many can only look on as their lambs sell for sometimes even half their normal price.

John Hughes, auctioneer, told us: "This is a disaster. The year is a write off for many farmers in the north of England. I've been looking back at the ledgers and lamb prices this week are less than they were in 1987 - they've gone back 20 years and more in some cases. Foot and mouth is bad, but now with bluetongue here as well we could have a really serious situation on our hands.

"It's no exaggeration that some tenant sheep farmers in particular are facing collapse - there will some up in the hills, in their seventies, who can't retire - who can't even pay the rent."

It's not hard to figure out who the farmers blame for their summer of hardship. The government aren't exactly flavour of the month. Many blame the Department for Environment, Food and Rural Affairs for allowing the disease to escape from the laboratory at Pirbright, in Surrey - the scene of the original outbreak in the beginning of August.

Colin and myself are sitting on the top tier of the auction mart watching the prices drop and drop.

He tells me that lamb traders are buying for an average of £23. Prior to foot and mouth 2007, lambs were selling for between £40 and £50. The mark-up is also staggering. To a supermarket a lamb in the auction ring is worth about £140 when packed onto the shelves with a barcode stuck on the front.

"It's a clear sign that confidence in the trade is at a low," says Colin. "These lambs are in good shape - but the price is just too low." Although auctions like the one in Kendal are able to trade, once livestock is bought it must then be taken straight to the farm and kept their for 21 days under the restrictions put in place by Defra. Farmers say this has slowed down the market and led to the price drop.

One farmer said: "If I bring lambs to the auction I've got to sell them otherwise I've got to take them back and I can't move them for another 21 days. The buyers know this and that's why the price is dropping."

Today came a crumb of hope for farmers as the EU agreed to ease the restrictions on meat exports. But the conditions are strict and mean that livestock cannot be sent for export through auctions, where most farmers trade.

Farmers welcome the easing of restrictions, but say it will make little difference to them. With the summer over and the winter just weeks away, the opportunity for farmers to sell their livestock for profit has passed. It will be another year before they can try again.

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