January 2012 Archives

Quick remedy for AIA headache

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Cumbria based accountant Dodd & Co has come up with a brilliant tool to help businesses work out how much Annual Investment Allowance they are entitled to.

Most farmers know that the AIA drops from £100,000 a year to £25,000 from April 2012.
However, working out just how much AIA you have available is complicated if your accounting year end does not coincide with the tax year.

The Dodd & Co calculator will do this for you in seconds - all it needs to know is whether you trade as a company or otherwise and what your year end is. It really couldn’t be simpler.

Higher beer and malt consumption

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Global beer consumption topped 182.69m kilolitres in 2010, a rise of 2.4% on the previous year, according to Japanese brewer Kirin Holdings.

It sounds even more impressive when put into English - it works out at 329bn pints - or 47 pints a year for every man, woman and child on the planet. Little wonder then that barley supplies are so tight, so to speak.

It’s good news for UK producers. Between July and November, DEFRA reckons brewers, distillers and maltsters used almost 731,000t of barley, 6% higher than the previous year. And malting barley prices remain firm, up around €15/t on September levels and about €73/t above feed barley, reflecting concern over EU supplies this season.

Meanwhile, the latest USDA figures show world barley trade is set to rise by 0.2m tonnes to 16.32m tonnes in 2011/12.

Food and farming insolvencies rise in 2011

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Business insolvencies in farming and food production and retailing rose significantly in 2011 according to an Experian report. A total of 107 agriculture, forestry and fishing businesses became insolvent in 2011, a 9.2% increase on 2010.

The importance of knowing your customer becomes increasingly apparent in food manufacturing with an 18.5% increase to 109 insolvencies in this sector. Food retailing also suffered a 7.7% rise with 196 insolvencies, well above the average of 6.3% across all sectors.

The most improved industry was spirits wine and tobacco with only one insolvency throughout the industry and a 66% decrease on the previous year.

Wynnstay posts record results

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Agricultural supply and specialist retail business Wynnstay Group has revealed its strongest ever set of annual results for the year ending 31 October 2011.

The group has achieved a 42% rise in turnover to £346.18m, driven by increased volumes and contributions from two recent acquisitions - Yorkshire-based Woodheads Seeds in May 2010 and Shropshire’s Wrekin Grain in May 2011. Pre-tax profits increased from £5.88m in 2010 to £6.85 in 2011.

The former co-operative based in Llansantffraid, Mid-Wales, is still farmer controlled with 50% of the company’s 3,804 shareholders being farmers and the remainder outside investors and staff.

Warning on bogus tax refund emails

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HMRC is once again warning farmers to be vigilant against bogus emails telling taxpayers that they are due a tax refund.

The emails are the latest in a series of scams which encourage people to hand over bank details and then have money taken illegally from their accounts.

Rob Hitch, partner at Cumbria based accountant Dodd & Co, advises clients not to open the emails or click any links.

“HMRC will rarely contact you by email. If you’re at all concerned visit http://www.hmrc.gov.uk/security/index.htm to see if the email you have received is listed.”

Any suspicious emails should be forwarded to phishing@hmrc.gsi.gov.uk and then deleted.

Red meat potential is there but so are challenges

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“You can win ... you can grow … you can be one of the food industry’s great success stories,” was the positive message from Joanne Denney-Finch to producers at Quality Meat Scotland’s conference this week.

IGD’s research showed that farmers were viewed as hardworking, down to earth, professional and vital to the future, said chief executive Ms Denny-Finch.

“I find farmers are usually very pleasantly surprised to discover just how staunchly they’re supported by the public!”

But shoppers hunting harder for deals create complications for retailers and their suppliers, she warned. “Demand is going up and down in waves … sales are harder to predict and profit margins are regularly squeezed.

“Red meat has been relatively less affected and you’ve been spared some of these problems although you could lose out on sales. So if not through price cutting promotions … you will need to keep finding other ways to grab attention and convince shoppers of the value you offer.”

Looking to set up a farm park? Or pull more visitors into an existing attraction? Then a visit to the 2012 National Farm Attractions Network conference and trade exhibition will help you keep abreast of the latest developments and pick up some top tips to help your project flourish.

For the first time the conference will be over two days including visits to well established farm attractions - White Post Farm Centre, Nottingham, and Sacrewell Farm and Countryside Centre, Peterborough.

Debate the state of the industry and look at new ways to improve catering, customer service and season ticket sales on the second day. The conference takes place at Drayton Manor Theme Park, Staffordshire on 7 and 8 February. To book a place call 01536 513397 or email info@farmattractions.net.

Sheep producers received a bigger share of the retail price for lamb in December 2011, but beef and pig farmers saw little change, according to AHDB’s latest UK Market Survey.

Strong export demand and tight supplies saw the average deadweight ex-farm price for lamb increase by 42p/kg in December compared with the month earlier. Over the same period the retail price declined slightly, so producers received almost 60% of the final retail price, up 6% on the month.

Overall during 2011 producers received 59% of the retail price, compared with 55% in 2010.

Beef producers received on average 54% of the final retail price during December, 1% down on the month, but 5% higher than December 2010. Pig producers saw a smaller improvement on the year (up 2%) and still receive a much lower share. The average ex-farm deadweight pig price equated to just 39% of the retail value in December.
 
 

Bigger wool cheques are in sight for 2011 clip

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Wool cheques from the 2011 clip are expected to be bigger than last year’s despite a slight reduction in prices at recent sales. With more than half the clip sold, the average wool price achieved at auction is 45p/kg above 2010 prices, said British Wool Marketing Board chairman Malcolm Corbett.

“Nothing is yet settled - a lot of British wool goes into carpets and manufacturers are having a tough time, and we could see a slight correction to prices before the season is finished. But we expect values will be better than last year, which was a 25-year high. Farmers should receive an average of 30p/kg more for their wool.”

Producers were paid an average of 102p/kg in 2010, double the 2009 level and three times more than in 2008.

Pig survey will gauge industry confidence

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Producers and others from the pig supply chain have been urged to take part in the annual confidence survey carried out by BPEX.

Questionnaires have just gone out to farmers, vets, retailers, civil servants and the allied industry and the survey should provide a vital snapshot of the industry and how confidence has changed from previous years.

It also asks whether people think BPEX is meeting the needs of the industry and gives respondents the opportunity to suggest what the organisation should do, head of communications Andrew Knowles said.

Anybody who would like to take part but has not received a questionnaire can do so via the BPEX website.

Straw demand outstrips hay at winter sales

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Demand for big bale straw remains strong, but there appears to be less buying interest for hay, according to reports from two recent sales.

In the Cotswolds 3221 big wheat straw bales averaged £17.95 each, to a top of £24 at Tayler & Fletcher’s sale. Big bale barley straw averaged £24.26, to a top of £33, while meadow hay averaged £33 a bale.

Prices were down slightly on the firm’s November sale and Adrian Cannon said that while over 80% of straw was sold, less than half the hay on offer was cleared. “There seems to be plenty of hay around and people are thinking they’re not going to need as much as expected,” he said.

There was a similar picture at Alexanders of Huntingdon, where all the big bale straw was sold, at an average price of £18.66 each for 1300 wheat bales and £25.90 for 757 barley straw bales. Big bale meadow hay averaged £36 a bale.

Campbeltown creamery to get upgrade

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First Milk has scrapped plans to move its Campbeltown creamery on the Mull of Kintyre and will instead invest in a new cheese-making facility at the existing site.

It says the investment will secure the future of 38 dairy farms and 100 jobs on the peninsula, providing processing efficiency that cannot be achieved with the existing plant.

Funding of the new facility will be supported by up to £2m from the Scottish Government.

First Milk had planned to sell the Campbeltown site to Tesco and relocate to a new location in the town. However, Tesco has indicated that it no longer wishes to buy the site, so the creamery will remain at its current location.

Event showcases farm diversification

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If you want to discover how to make the most of farm diversification, then don’t miss the National Farmers' Retail & Markets Association event in Edinburgh later this month.

The three-day "Farm & More" event beginning on 30 January features visits to successful farm retail businesses, a conference discussing current and future trends and a trade show with over 100 exhibitors focused on the diversified farm sector.

Speakers at the conference will include Scottish rural affairs secretary Richard Lochhead, Scotland Food & Drink chief executive James Withers, plus TV presenter and eco-engineer Dick Strawbridge.

Tickets are required for the conference and farm tours, but the trade show on the final day is free if you pre-register. Go to www.farmandmore.org.uk for further information, ticket prices and online booking.

Food inflation to fall below 2% later in 2012 - EFFP

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Retail food inflation will fall below 2% by the second half of the year, predicts consultant EFFP. Lower general inflation, an improved global grain crop in 2011 and continued global economic weakness will all contribute to the reduction.

UK food inflation peaked in the summer of 2011 just above 7% but started to fall through the autumn and the latest official figures released in mid-December for November showed the rate at just under 5% year on year.

Fund targets wind and hydro power

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Onshore wind and hydropower developer Dawn Energy has launched a £5m fund to finance wind developments up to 1.5MW or hydro schemes up to 1MW.

Interested landowners must demonstrate their land is potentially viable for either scheme before the firm carries out its own feasibility assessment and will select the best sites to qualify for the fund.

Dawn Energy will enter a joint venture with the landowner and create a special purpose vehicle for the project, of which both parties will be shareholders. The firm will buy an equity share in the SPV and also provide senior debt finance for the construction and development of the project. The interest rate will depend on the size and cost of the project, however managing director, Waseem Hussain said it would be competitive with current market rates.

There is no set minimum or maximum amount available, although very small micro-scale projects are unlikely to qualify.

“In the current economic climate, we are keen to support landowners who want to construct their own single turbine or hydro power schemes but are finding it too difficult to obtain the appropriate funding from banks,” said.

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About this Archive

This page is an archive of entries from January 2012 listed from newest to oldest.

December 2011 is the previous archive.

February 2012 is the next archive.

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