News Still reasons to be optimistic despite challenging year
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arming faces a challenging year – but the best growers and livestock producers will continue to run successful businesses, say analysts. The coming 12 months will see many farm businesses face increased pressure on profitability, according to Outlook 2022 – the annual look at the year ahead by farm business consultants Andersons. While output prices generally look set to be good, the issue of rising costs will take centre-stage, says Andersons partner Richard King. Coupled with another drop in the Basic Payment to farmers, this is likely to see profits fall, he adds. “The last two years have been dominated by the twin shocks of Brexit and Covid. It seems increasingly clear that there is not going to be a date when these two issues can be considered ‘done’ – the effects will be with us for many years.”
High prices Farmgate prices have been buoyed for some years now by the relatively weak value of Sterling, says Mr King. They remain high across many farm sectors – with some notable exceptions such as pigs. But it remains to be seen whether prices will be sustained if consumers change their buying habits post-Covid. “Events have thrown many of the previous certainties up in the air and it is not entirely clear yet where the pieces will land.” The coming 12 months could see Sterling appreciate against the Euro and Dollar – with a negative impact on farm incomes. At the same time, costs for many key inputs – such as fertiliser and fuel – have risen rapidly. Price rises have also been seen in the cost of many capital items, such as machinery, equipment and buildings. Lack of labour is an ongoing issue for many businesses too – including those in the sector livestock (see page 33). “This is making life more difficult for those farmers who wish to invest in their businesses,” says Mr King. Rising inflation is also making its mark felt 4 MIDLAND FARMER • JANUARY 2022
in the cost of general overheads such as office administration. These changes in the farming economics are all set against a long-term imperative to address environmental issues – especially around climate change and pollution. This will require armers to “to their bit” alongside other industries. Despite this a raft of challenges, Mr King has an upbeat message for
Some farm sectors have fared better than others
(Photo: Simon Collins/ Shutterstock.com
farmers. “With so much uncertainty around the external business environment, it might be easy to become fatalistic,” he says. “Farmers have control over how they structure and operate their businesses. Experience shows that being the ‘best in class’ and having a longterm plan allow farms to be successful – whatever the economic and political conditions.”
Young farmer wins inaugural award
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hird-generation farmer Charlie Beaty has been named Young Farmer of the Year for Warwickshire. Ms Beaty, 26, (pictured) works at the Dairy Farm, a family-run farm on Maxstoke Lane, just inside the Warwickshire county boundary. She will be presented with the trophy and a cash prize at the Kenilworth Show this coming June. It is the first time the award has been made. It has been granted and made possible by the Kenilworth and District Agricultural Society (KADAS) supported by Brian Dalby and the Warwickshire
Agricultural Society. A panel of three judges hand-picked Ms Beaty for the accolade. It recognises farmers under the age of 30 who have a great work ethic, demonstrate a real knowledge of their area of agriculture and
are positive ambassadors for UK farming. Ms Beaty said: “This is a time of change for farming and agriculture, but every day is different and I love it. “I’m committed to improving and continuing to improve the farming business we run in this big period of change.” A Harper Adams University graduate, Ms Beaty has spent time working in Australia and New Zealand since graduating in 2017. She now works the farm in Meriden with her dad and uncle. All three follow her grandad who initially took on the tenancy in 1958.
