We have now completed all gross margin accounts for the 2020 harvest across our portfolio of arable clients. A comparison of the 2020 harvest against the 2019 harvest, drawn from clients’ year end accounts, is summarised below:
Due to difficult winter establishment, the 2020 harvest again shows significantly lower yields for all crops, across all farms, due to higher spring planting.
We have again seen a drop in oilseed rape drilled due to problems with disease and pest control. Our top performers’ yields are down but not as much as our all farms average. Oilseed rape area dropped from 23% to 8%, with further reductions in 2021. Oilseed rape output has dropped from £420 per acre to £324 and our top performers saw a drop of £18 per acre from £463 per acre.
Wheat output shows an increase of £43 per acre to £667 per acre for our top performers, against a £32 per acre drop for all farms from £569 per acre to £537 per acre.
Barley top performers show a drop of £67 per acre to £355 and a decrease of £45 per acre for all our farms from £379 to £334/acre.
Another year of higher spring plantings has reduced variable costs, particularly sprays.
Farmers are again looking at fixed costs and reducing these where possible although it is difficult to see where any significant savings can be made. Machinery costs continue to rise and with short supply of some kit great deals are going to be hard to find. We may see more sharing of kit and resources in coming years – time will tell.
Agricultural rents hold steady with no obvious reductions.
In the short term, buying and selling in volatile markets makes for an uncertain future.
The impact of the gradual removal of the Basic Payment is known, but the support thereafter is uncertain. Significant reductions are inevitable. Our farmers are facing changes which will have a huge impact on future farming strategy. Good advice and business planning will be key.
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