We are currently busy preparing 2018 harvest gross margin accounts for our arable farming clients. You can see an early indication of how the 2018 harvest compares with 2017 harvest, drawn from clients’ year-end accounts, below.
Compare how your farm performed in the 2018 harvest. If you are concerned about your farm’s performance please contact us.
Key trends in the farming and agriculture industry:
- Early indications across all farms show lower yields for barley and wheat crops. Oilseed rape yields show a slight improvement. However, our top 20% have seen increases in yields across all crops. Significant increases in prices, especially for early harvest sales, has resulted in gross output per acre across all farms increasing by £55 per acre.
- Savings are being achieved across variable costs, mainly a reduction in spray costs possibly due to more spring cropping.
- Average labour, power and machinery costs have increased by £11 per acre to £189 but our top 20% have achieved a small saving of £4 per acre bringing their total down to £181.
- Currently, we are seeing a conflict: average machinery repairs have increased to £27 per acre suggesting kit is being kept longer, however, depreciation has also risen by £12 per acre due to investment in new machinery.
- The £8 per acre increase in property costs is due to building repairs suggesting money can be found for essential work around the farm.
- Administration costs have increased by £8 to £40 per acre, the rise is in professional and management fees showing farmers are looking at possible new projects as they plan for the impact of lower BPS monies in the coming years.
- We have already seen a small reduction in rents to an average of £32 per acre. The £11 increase in finance costs to £29 per acre is down to bank loan interest, due equally to new advances and the restructuring of long term debt.
- Other income has on average increased by £14 per acre to £232. There is an increase in mid-tier monies being received but this looks more likely to be due to a late payment on previous schemes rather than an increased uptake of new schemes. Forage sales for our arable farmers have seen an increase of £10 per acre. We have noted a drop in receipts for renewable projects.
- Cash generated by farmers through farming and other activities has increased by nearly 25% to £206 per acre. This coupled with lower drawings has resulted in a cash surplus of £66 per acre. In harvest 2017 there was a cash deficit of £15 per acre.
- We are seeing that funding for new projects, business restructures and retirement plans are increasingly difficult to find. Finance providers appear to be asking for greater reassurance.
We have been specialists in advising the farming community on their rural businesses since we began. We advise lots of rural businesses including dairy and livestock farmers and arable farmers. We also advise equine and bloodstock businesses.
Many of us are from farming backgrounds so we understand the challenges and opportunities that face the farming industry. If you would like any advice please contact us here.