SHEEP farmers must know their costs of production in order to argue for proper returns.

Mike Keeble, Wensleydale farmer and newspaper columnist, said that, armed with accurate information, they could go to supermarkets and buyers and demand a proper price.

Farm cashflow problems were going to be rife in the industry and the banks were already worried about it, he said.

Suckler cow men were also talking about cutting numbers which could have a major impact if they switched to sheep.

Mr Keeble urged producers to join the Red Meat Industry Forum, whose group structure he is organising in the North of England. The idea is to have small groups of farmers - ten or 12 - working together to improve their genetics, marketing and returns.

"Marketing is where the RMIF really comes in," said Mr Keeble, "It is potentially one of the strongest tools we have in the industry today and people have got to get on board."

Dairy and arable farmers knew exactly what their production costs were. It was time sheep and beef producers knew their costs per kilo. A supermarket representative had told him that, when he asked farmers for their price, they usually quoted the previous week's price at the local mart.

"If we can analyse our costs and know exactly what they are, we will be in a position to go to buyers and say: 'This is what it is costing us and this is what we need.' " said Mr Keeble. "We can also go to Margaret Beckett and say: 'This is the situation, Minister.' "

The RMIF business groups work by individual members giving all their figures and information in strict confidence. The information is pooled to get the group average. The highest and the lowest can be seen and that is when steps can be taken to achieve improvements. Genetics, production costs and marketing can all be looked at and improved.