I was talking to this farm finance expert the other day. He spends most of his time visiting farmers and studying their accounts. I reasoned he must know more than most about the number of acres it takes these days for a farming family to make a living. So I asked him.
Its dangerous to generalise, he said cautiously, but here in Norfolk on Grade Three land with a typical arable rotation and no livestock I would estimate you would need a minimum of 1,500 acres (600ha) to be viable. If you have high overheads, like a big overdraft, a huge mortgage or a high rent, you would, of course, need more. But in such a case you would ideally want to increase in multiples of 1,500 acres to be able to run tackle and employ labour economically.
If you farm less than 1,500 acres (and we do!) its necessary to diversify to create other income streams to make up for the lack of acres, he went on. And if you do it well, the non core income can be more secure than that from producing commodities. That comment gave me a little comfort for we have diversified for years. But it also reinforced the need to either get hold of more land to farm (and land prices and rents continue to increase) or develop diversified activities further.
Does your advice hold good now that arable crop prices have increased sharply? I asked. Very much so, he replied. I am not expecting bumper farm profits in East Anglia this year. Do you realise that although the value of spot wheat is some £160/t, because of forward selling, the average achieved for grain harvested this year is likely to be under £100?
That too gave me food for thought.