This shooting season is only just nosing past the finish line, but already commercial and syndicate shoots will be turning their attention to next years order books. Many will have them filled to bursting, such is the growing popularity of game shooting in certain parts of the country. Others will be eyeing the headlines on growing wheat and fuel prices, coupled with dwindling fortunes in the City, and feel pinpricks of anxiety on the back of their neck that have been absent during the last few seasons of plenty.
Jerry Barnes is senior partner at the Bristol Office of chartered accountants Saffery Champness, representing a national practice of landed estates all over the 300,000 acre mark, ranging from Cornwall to Scotland, Suffolk to Wales. He explained that there are two major vectors at work on the cost of shooting at the moment, which will be reflected in the order books over the coming months, especially at the commercial and corporate level. “In recent history, the demand for shooting has been greater than supply, so shoots have been able to raise their prices steadily to as much as £40 after VAT per bird in various locations. However, we have seen in the last year that the froth is coming off. Lower City bonuses, the credit crunch and a fear of recession may make certain corporations, who traditionally take a large number of days, be more cautious in the future. We have seen several big banks shedding off senior executives, many of whom may have been regular Shots. What happens when the replacement is anti-shooting and sees a good opportunity to save expenditure?”
The second influence on shooting prices for next year is the increased cost in commodities, especially wheat and fuel. Jerry quickly ran through some facts and figures, which he says have an obvious impact on the top line of a shooting business. “In the 2005/06 harvest, wheat was selling at £60 a tonne. This equated to 8.5% of a shoot’s annual turnover. By 2006/07, it had risen to £90 a tonne, a hike to 12.5% of the turnover. This year, we have seen prices rocket to £150, even £180 a tonne. This means that feeding your birds will now gobble up nearly 20% of your annual turnover, similar to the cost of running a gamekeeper. “There is an argument though that these rises are a commodity correction rather than explosion,” reasoned Jerry, “In 1996/07, wheat was up at £120 a tonne, so the farmers had it pretty tough for the best part of a decade in comparison.”
The rise in oil prices are also well documented, with the cost per barrel escalating to above $100 a barrel, double that of this time last year and quadruple the cost of 2002. Car drivers feel the pinch every time we fill up, with any litre close to the even pound mark being something of a bargain. Only a year ago, the idea of paying more than a pound was sacrilege. The price of red diesel has also doubled in the last 12 months, while gas and electricity have both shot up.
Of course, these rises are way over that of inflation and the shoots have to decide whether to pass these costs onto the buyer. “If this translated into a rise of 5%, then you could start to see birds being offered at £45 at the top end. How will the buyers react? They may decide to shop around to find a better deal. Or they may opt for a smaller day, perhaps a 175 or 150 bird day, rather than a 200 bird day. The problem, of course, for the shoot, which operates to a tight profit margin, is that the cost of laying on even a 100 bird day is almost the same as that of laying on a 200 bird day. It is the same overheads, such as beaters, vehicles; it is only the cost of feeding the birds that differs. Shoot owners may decide to absorb the costs by surviving on fat reserves for a year and ride out the storm. However, how many will be able to do that for more than a year?”
There are several other influences on the price of shooting which may have a bearing the coming months, says Jerry. While the cost of shooting has gone up, so has the price of shooting rights, as tenants and farmers have caught onto the added value of their land. “There has long been a tension between shooting and farming,” said Jerry, “although in recent times, the farmers have been keen to allow shooting on their land as, in certain cases, it has represented a better income source than agriculture. Now that the price of wheat has increased and the EU has suspended the set-a-side regulations, allowing more areas to be planted with commercial crops; farmers may demand more for their rent. At the other end of the scale, with beef and sheep prices being so low, there may be more opportunities for shooting on non-arable land.”
Health and safety regulations are also putting a burden on shoots, says Jerry, whether it is the cost of installing a larder or buying new vehicles to transport the beaters, worthy as these concerns may be. The time spent on excess form filling also costs money. The price of lead shot has also had a bearing, although it is negligible when considering the cost per bird.
For Jerry, the 2008 season will be one of consolidation rather than huge price increases or wholesale collapse. “The last two or three years have been a time of plenty for shoots. We have seen that in the quality of the shoots and the number of new people joining the sport. Nowadays, we can afford to be picky and choose only to shoot 30-yard plus birds. It is a thriving industry, but I expect some of the froth to come off next year. There won’t be the same bells and whistles. Shoots might serve a lesser cut of meat at lunch or drink a newer wine. Margins will become tighter, especially if clients opt for smaller bag days. At the corporate end, it may well be that lower bonuses and expenses mean that the bigger commercial shoots feel the pinch. Some may find they are running out of money, if they cannot fill their order books. Shoot employees may be forced to accept a lower than inflation salary increase to keep their jobs in the short term. 2008 may be a year to look to our fat reserves.”
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We also asked a manager of a shoot in the West Country how he was likely to offset any extra costs caused by an increase in expenditure. He was determined that the shoot would keep the price per bird the same, although given it is already touching £40 a bird after VAT, it is still a sizeable investment for anyone who takes a day.
“One tactic has been to offer the buyer a complimentary knock-about’ day at the start of the season. So we have all the buyers over for a relaxed 100-bird day, just as a thank-you for their loyalty. We might take in the shoot extremities and hedgerows, rather than going for the main drives, so it doesn’t cost us much extra to lay it on, but the clients are delighted. If shoots are going to have to put their prices up, then they will have to find ways of making the pill easier to swallow for their clients.”
For an estimation of next year’s shoot budget, buy this week’s edition of Shooting Times, out on the 31st January.