The average Welsh suckler beef farmer has only covered two thirds of their production costs in the past year, new figures show.
Statistics published in the Wales Farm Income booklet revealed that during the 2011/2012 financial year the top third of farmers managed to cover 96% of their production costs, while the bottom third were recovering less than half of their outgoings at 43%.
On average, Welsh beef farmers were found to only be covering 63% of their costs of production.
“Power, machinery, feed and forage were the main expenses for suckler calf producers,” said Hybu Cig Cymru industry information officer John Richards.
“The figures show that suckler farmers were having to pay 217 pence to produce a kg of beef, but were only receiving on average 137 pence per kilo through enterprise returns.”
The levy board advised farmers to examine their costs closely and try and find ways to make savings and to ensure they got the most for their livestock.
“Maximising productivity is essential. Focusing on health and fertility within the herd should make the cattle enterprise more profitable and therefore sustainable” said Mr Richards.
HCC said the market had shown signs of improvement in the past seven months as a result of improved prices across all sections of the beef sector including sucklers, finished cattle and cull cows.
“This is due to a tightening of supply on the beef market both here in the UK and globally, which has limited imports of beef from abroad and helped to drive a price increase for producers,” added Mr Richards.
