'Future prospects look positive across all sectors’, says NFU Economist

“There is low confidence in the short term but future prospects for the industry look positive across all sectors,” this was the reassuring message from NFU Economist, Anand Dossa, at the recent NFU Cymru Anglesey Annual Conference.

Anand, who has worked in the economics team at NFU for four years, explained to members how the UK economy has recovered and how this is influencing the farming industry, he said, “The UK’s economy has on average been the fastest growing economy in the G7, matched only by the U.S. However the business cycles for farming have been less than satisfactory, the past 24 months especially have brought many challenges.

“Farmgate prices, across all sectors are markedly lower than they were two years ago. This is down to many factors, one being the strengthening Pound against the Euro, which has made imports into the UK from the EU cheaper and has reduced the competitiveness of UK exports. The Pound/Euro exchange rate has also had a substantial bearing on the value of direct payments through the Basic Payment Scheme (BPS) this year, the lowest rate in eight years. All of these factors will lead to further pressure on cash flow over the coming months therefore it comes as no surprise that UK farm business borrowing has risen.

“Volatility in the market is the new norm. In terms of trade, overall volume of lamb exported from the UK in the first ten months of 2015 fell by 21% compared to 2014, while beef imports are up over 8% on the year. Although short term confidence in the industry is understandably low, there is a growing World demand, therefore the priority now should be in finding new export markets to benefit UK farming.”

Christine Jones, NFU Cymru Anglesey Chairman thanked Anand Dossa for his open and honest discussion with local farmers about the global economy and the influencing factors affecting the industry, she also thanked HSBC for sponsoring the conference. This was Christine’s last meeting as Chairman after three years in the position. She said, “I would have liked to have handed over the chairmanship when the industry was in a better state. Every sector has suffered but, like Anand, I still remain convinced that in the long term Welsh farming has a positive and profitable future.”