Farm borrowing continues to rise markedly, up by 6.4% to a new record of £17.769bn in the year to the end of June.
This is the amount borrowed in all currencies and marks a rise of £208m just in the month of June. This compares with a £163m May-June monthly rise last year.
The impact of low commodity prices was likely to resonate for a further 12 months, said NFU economist Anand Dossa. While a lower sterling value had helped boost export prices, some sectors such as dairy and cereals were looking at the second year of significant profit reductions.
Farmers were using 72% of the facilities available to them at the end of June, the same proportion as a year ago.
The latest figures mark a rise of almost 90% in farm borrowing over the last 10 years, compared with a 176% rise in UK farmland prices over the same period.
The Bank of England‘s monetary policy committee will meet on Thursday (4 August) to decide whether to reduce the bank base rate in order to boost the economy, with any change announced at noon that day.
Although markets are expecting a reduction and may have factored it in to some extent, a fall in rates could further lower the value of the pound, possibly boosting farmgate prices for farm produce that relies heavily on exports, such as cereals and lamb.