Agricultural machinery investment optimism
A recent Barclays Business survey has shown that about half of UK farmers (47%) plan to spend more on new and replacement machinery in 2011 than in the previous year, with about a quarter planning to spend less. The expected increase in investment could be signs of cautious confidence returning to the agriculture sector.The survey of farmers attending the 2011 LAMMA event, the UK’s leading farm machinery and equipment show, also revealed that despite increasing their year-on-year spend, only one in ten planned to invest more than £100,000. About half were expecting to invest between £25,000 and £100,000, while about two-fifths plan to spend less than £25,000. Commenting on the findings, Martin Redfearn, Head of Agriculture at Barclays Business, said: "Current high prices for combinable crops have boosted the confidence of many in that sector. Forward prices also look encouraging so we are not surprised that many farmers are planning a higher spend than last year. However the livestock sector is still likely to pay a high price for feed based on the same forward prices with little prospect of big reductions in this major cost area in the near future. Livestock farmers might well have accounted for many of the more modest investment plans." Barclays Business agricultural managers attended the LAMMA event to discuss business strategies with farmers and to help then understand how making regular planned investments in machinery and equipment can encourage growth in their businesses. The Barclays Business Agriculture survey covered 92 respondents who between them manage 34,000 hectares.
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