Friday, 27 July 2012

Testing times for arables farmers

As I pen this article I am looking out of the window at blue sky – a rare commodity this summer and with the forecast looking a little more positive, maybe the worst of the summer weather is behind us which will not come a moment too soon for our arable farmers.

Indeed, I have already seen the first crops of winter barley being harvested and if the weather was to stay fine for the next month or so this could prove to be a profitable year. This is because cereal prices have increased sharply in the last month due to warnings for poor harvests in the United States and Russia, both due to drought conditions.
As a result the spot price for old crop wheat has risen to over £210/tonne and prices for new crop wheat are up to around £180/tonne and on the futures market up to £190/tonne for delivery in November this year.

At these prices our arable farmers should be able to make a healthy profit provided of course the weather does dry up for a reasonable period. This will enable heavy machinery to get in to the currently waterlogged fields and also hopefully dry out the grain sufficiently so that it will not need to go through the time consuming and expensive process of having to be dried before storage.

However, the wet weather has been very testing and some crops have suffered from fungal diseases in particular. It has been difficult to keep such diseases under control because there have been very few opportunities to spray the crops either because it has been too wet or too windy. So even though the cereal prices may be high it remains to be seen how yields will have been affected by other factors such as disease and the generally wet weather.

The prospects for arable farmers are of course in stark contrast those of their dairy farming neighbours who are suffering badly as milk prices fall as sharply as arable prices are rising. This has driven some to direct action and as many will have seen on the news this has manifested itself in this area with farmers blockading the Robert Wiseman Dairy just of the M5 near Bridgwater.

This only goes to demonstrate how complicated the farming industry has become with droughts in the United States benefitting our arable farmers through increased cereal prices while a fall in the price of cream on the world market has stimulated the latest controversial cut in milk prices. Sadly these are all things over which our farmers have little or no influence and so all they can do is manage their own business as efficiently as they can and then just hope for the best with those things they cannot influence – such as the weather. 

James Stephen MRICS FAAV
Rural Practice Chartered Surveyor, Wells

T: 01749 683381

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