26 March 2015 | Online since 2003



Weather and feed costs denting farmer confidence


The effect of adverse weather conditions combined with concerns over feed bills have dented farmer confidence to invest according to a new survey.

Farmers remain relatively optimistic about the future of farming over the long-term but confidence in the red meat and pork sectors looks to remain weak.

NFU chief economist Phil Bicknell said the results came as “no surprise” given the exceptional year many farmers have experienced.

"The challenging year we’ve had makes it easy to forget that farming has been something of a success story in recent years, increasing its contribution to the economy, creating jobs, and seeing improvements in farm profitability, as well as underpinning one of the most successful British industries, food and drink" he said.

This, combined with a relatively lethargic world economy, has weighed on prices across the globe.

Results from the survey, now in its third year, show that last year’s relatively optimistic outlook has faded, and only 22 per cent of farmers surveyed are confident about the year ahead, compared to nearly one in two twelve months ago.

Some 42 per cent of farmers told the NFU that their farm businesses were in for a tougher year, up from 30 per cent in 2011.

Phil Bicknell said: "The drop in short term confidence is repeated across the sectors. For arable and horticulture, declines in crop output and quality, alongside difficult autumn planting conditions, have undoubtedly shaped farmer attitudes. The lowest levels of confidence, however, are seen in the livestock sector."

Rising animal feed costs have been well-documented in recent months, and the confidence of pork, dairy and red meat producers has tumbled as costs have risen.

Around the world, pig farmers are selling their herds because they can no longer afford to feed their pigs.

In the United States the government introduced a pork-buying programme in a bid to keep its pig farmers in business. And the Chinese government is putting pork into cold storage, as a buffer against shortages and high prices next year.

All main European pig-producing countries report shrinking sow herds. Falling numbers in the 12 months to June 2012 have been reported this week by Denmark (-2.3), Germany (-1.3), Ireland (-6.6), Spain (-2.8), France (-3.2), Italy (-13), Hungary (-5), the Netherlands (-3.6), Austria (-2.8), Poland (-9.6) and Sweden (-7.2).

While other sectors show confidence rising in the long-term, over the next five years this remains weak for red meat and pork. Tight supplies already characterise these markets and both sectors need greater confidence if we’re to see them able to respond.

"The longer term outlook is generally more positive than the short term attitudes" Bicknell said.

"Maintaining a degree of confidence is critical, given it shapes investment and production decisions across the industry. Results for the horticulture, poultry and arable sectors are notable in that they all show signs of increasing optimism when considering business prospects in the next five years.”

Across the channel there is a similar picture.

According to a recently published Copa-Cogeca confidence survey, the mood of French farmers has worsened, partly explained by high production costs and the poor economic situation.

In Germany the positive mood among farmers can be attributed to an improved analysis of the future fiscal situation, while their views on current economic developments are less positive compared to the first quarter of 2012.

After a summer of persistent rain, UK yields for 2012 have been mixed across arable crops which could cause food prices to rise further.

According to an NFU survey, English wheat yields decreased by 15% on the five year average.

The harvest survey also revealed that other major arable crops grown in the UK have performed well in difficult conditions, although without the investment made in technology by farmers the wheat harvest could have been much worse.

"We have seen a relatively low wheat yield this year, below seven tonnes per hectare. This is something not seen in the UK since the late 1980s" said NFU combinable crops adviser Guy Gagen.

"The abnormally high rainfall across the UK since early summer this year has depressed wheat yield. Without considerable investment by our farmers in recent years, the results for wheat could have been much worse this harvest."

Figures show England and Wales had the wettest summer for 100 years, with up to 14 inches of rain falling from June to August.

"There are many farmers who are down 25 to 30% on the wheat crop" said NFU President Peter Kendall.

"In some cases you looked from the outside and you thought, this crop will do over four tonnes to the acre - and it's been struggling to do three and some cases two tonnes to the acre."

"It's been soul destroying for the farmers growing the crops."

Many farmers will be looking to harvests across the world throughout 2013 to improve commodity supplies and reduce some of the pressures on feed costs.

Bicknell added: "However, policy makers will also shape industry confidence in the coming year. Two issues remain key. Firstly we need to see continued work for better regulation across all sectors to remove additional and unnecessary burden on farming businesses. Second, it is essential our government negotiates a CAP deal for British farmers which ensures they remain on a competitive level playing field with farmers and growers across Europe.

"Securing farmer confidence and long-term investment in this country will mean this industry can play its full part in providing the raw ingredients for the £80bn food and drink sector and continue helping the country on its way to economic recovery."

Download



Comments


No comments posted yet. Be the first to post a comment

To post comment without approval login or register

Display name

Please enter your name

Email (optional)
Comment

Please enter your comment

Post Comment

Your comment submitted successfully.Please wait for admin approval.

Some error on your process.Please try one more time.



Jobs


20 March 2015
Business and Administration Apprentice
Apprenticeship frameworks we offer include Agriculture, Animal Care, Trees and Timber, Horticulture, Butchery, Business and A...

14 March 2015
Farm Operatives
We are currently looking for a team of staff to work on a Farm environment in between Truro area. You MUST have your own tran...

5 March 2015
Trainee Farm Manager
Reporting to the Farm Manager, you will be responsible for assisting with all aspects of the day to day running of one of the...

10 March 2015
Trainee Butcher
Middle Farm - Trainee Butcher. An exciting position offering the opportunity to learn all aspects of retail butchery....

18 March 2015
Assistant Traffic Planner
Please apply to Brian Metcalfe, Metcalfe Farms Haulage Limited, Washfold Farm, Moor Road, Leyburn, North Yorkshire, DL8 5JZ, ...




Top stories you may have missed
23 March 2015 | Cattle

UK butchers face difficulties to recruit...

Butchers in the UK are losing a generation through lack of training opportu...


20 March 2015 | Arable

Dust - the secret fertiliser?

NASA research has revealed how dust blown from the Sahara desert helps supp...


19 March 2015 | Arable

The Budget 2015: A Farmer's Budget?

“In the run up to the Budget 2015 most commentators were predicting that th...


17 March 2015 | News

UK's first floating solar power system l...

The UK’s first fully operational floating solar panel system has been unvei...


13 March 2015 | Animal Health

Labour and Conservatives clash over badg...

Axing the badger cull in England and Wales will save more than £120 million...


12 March 2015 | News

Solar could be cheapest energy source by...

By 2025, solar power could become one of the cheapest forms of energy in ma...


11 March 2015 | Finance

English buyers turn their attention to S...

Demand for Scottish farm land remains strong and continues to be better val...


9 March 2015 | Cattle

2020 vision for the Welsh red meat indus...

The Welsh red meat industry should aim to increase sales by at least 34 per...


6 March 2015 | News

MP raises egg industry concerns on trans...

Fears about the impact that a proposed transatlantic trade agreement could ...


Stay safe and legal when flying drones

The use of Unmanned Aerial Vehicles and Unmanned Aircraft Systems - or dron...