The Rural Bulletin 30 June 2017

Arable farmers cut costs but still losing money

Arable farmers lost money on all major crops in 2015/16, despite many enjoying record yields, according to the latest Farm Business Survey for England. Producers lost an average of £34/t on wheat, £50/t on winter barley, £69/t on winter oilseed rape and £89/t on spring beans. However, a cut in overall spending and a move to spring crops reduced fixed costs by £29/ha, year-on-year, to £653/ha. 

Arable businesses increased borrowings by 4% to deal with periods of low cash flow and invest in new income streams, helping to drive a 20% increase in diversification output. However, the Basic Payment Scheme (BPS) payment subsidised wheat to the tune of £17/t, says report author Ben Lang. “In an uncertain post-Brexit environment, there will be even greater requirement for competitive pricing and production regimes.”

Watch out for slurry pollution

The danger of sub-standard slurry stores and application techniques has been highlighted after a Somerset dairy farmer was ordered to pay almost £22,500 for polluting the River Frome. The pollution was caused by an overflowing chamber in the slurry lagoon, just days after a spillage from a slurry pumping operation. The slurry affected the watercourse for more than 6km, killing fish and affecting local anglers, kayakers and swimmers. The defendant admitted liability but was found to be negligent for not informing the Environment Agency about the initial spillage.

Access to labour a serious concern

Access to migrant labour is becoming a serious concern for the whole farming food chain, not just post-Brexit, but right now. According to an National Farmers Union (NFU) survey, over 1,500 on-farm vacancies went unfilled in May, with the number of seasonal workers coming to harvest fruit and vegetables dropping by 17% in just five months. Quality Meat Scotland has warned that 98% of Food Standards vets are non-UK nationals, with low domestic unemployment and the weak Pound compounding the issue across the whole sector. 

Farm lets increase in length – but Scottish sector still declines

The average length of new farmland lettings in England and Wales in 2016 increased noticeably on previous years, according to a new survey by the Central Association of Agricultural Valuers. At 4.48 years, the average let, covering everything from seasonal grazing to full farms, was eight months longer than in 2015. When land fell vacant 86% of 1986 Act lettings and 94% of Farm Business Tenancies were re-let. However, in Scotland only 35% of holdings falling vacant were re-let, leading to a further decline (-28,000 acres) in the total tenanted sector.

If you are a rural property owner or business and would like further information on any of the issues touched upon, or need advice on any other matters our Rural Consultancy Team is here to help.