I seem to recall that Mark has said in an interview that's on MK News that the song was indeed inspired by foot and mouth disease.
Having said that, however, I think that the dark undercurrents of the lyrics could well be taken to hint at violence. It is an extremely powerful piece of work both musically and lyrically, and the hints at infidelity, etc., make this a song that is not only about a hillfarmer having problems with his animals.
I cannot say precisely what it means but it sounds very menacing. I am not sure that the lyrics about the dog are meant to imply that the dog is now his only friend - why leave him be? It is possible that the dog is to be taken metaphorically.
The lyrics are difficult to get a good grasp of partly because, as others have mentioned, the narrator seems to address different people at various points. Also, he says that "you", his wife one supposes, "were the only one", which would imply that they are no longer together. Yet, he also tells someone not to wait up for him, in the present, as if she is still around. These are thought-provoking lyrics.