Friday, December 15, 2017

Good prospects for 2017 – but caution needed in longer term

January 3, 2017 by  
Filed under News & Business

Prospects for most UK farming sectors are much improved at the start of 2017 compared to a year ago. But farmers are being urged to use a welcome Brexit boost in incomes to prepare for tougher times ahead.

Farm profitability is expected to rise by a further 15% this year, according to forecasts by farm business consultants Andersons – buoyed by the fall in the value of sterling following last year’s referendum vote to leave the European Union.

Economic uncertainty

“The immediate effect of the economic uncertainty caused by the referendum vote has seen the value of Sterling fall by over 10% against the euro and dollar,” says Andersons head of business research Richard King.

“The rule-of-thumb is that the weaker the pound becomes, the better it is for UK farming profits. However, the drop in Sterling is inflationary and input costs have increased, and will probably continue to do so.”

The decision to leave the EU has the potential to affect the farming industry more than any single event in the last four decades, says Mr King, who is also editor of the 83rd edition of the Agricultural Budgeting and Costing Book which has just been published.

Squeeze profits

Output prices show a considerable uplift in many sectors according to the margins in the book. But Mr King cautions that rising input costs are likely to squeeze profits in the longer term. This means producers should use money generate now to prepare for the future.

Farmers should use the better returns forecast to set themselves up to be resilient in the medium to long term, says Mr King. Good budgeting is an important part of this, he adds. “Businesses need to concentrate on making their own enterprises as efficient and robust as possible.”

Uncertainty continues to surround the UK’s post-Brexit trading relationship with the remaining 27 EU countries and the rest of the world. At the same time, the government is continuing to devise a new agricultural policy which will come into effect after the UK leaves the EU.

Farm leaders must make sure agriculture isn’t sidelined during Brexit talks, says Mr King. “The farming industry will need to make its voice heard, if only to counterbalance the lobbying of the many other self-appointed ‘stakeholders’ in the countryside.”

The ABC Book is completely revised every six months to reflect rapidly changing markets. The 83rd Edition is now available from Agro Business Consultants for £47. For more details go to 

www.abcbooks.co.uk or call 01664 567676.

Speak Your Mind

Tell us what you're thinking...
and oh, if you want a pic to show with your comment, go get a gravatar!

 
barbour pas cher barbour pas cher barbour pas cher barbour pas cher barbour pas cher golden goose saldi golden goose saldi golden goose saldi golden goose saldi golden goose saldi doudoune moncler pas cher doudoune moncler pas cher doudoune moncler pas cher doudoune moncler pas cher doudoune moncler pas cher moncler outlet online moncler outlet online moncler outlet online moncler outlet online moncler outlet online