Arable farmers borrowing more
BANK borrowing by arable farmers has increased nearly three times as much as the average for all farms over the past year, says Barclays Bank.
"In western England and Wales in particular, arable farmers are now more heavily financially stretched than their dairy farming neighbours," said agricultural director John Page, speaking at the Home-Grown Cereals Authoritys recent annual marketing conference in London.
"This is true even in traditionally strong cereal growing areas such as Shropshire, the Cotswolds, Wiltshire and Dorset. We have already seen borrowing by arable farmers up 17% year on year, compared with an average of 6.2% across all types of farming."
Cereal growers should consider carefully whether they are long-term, committed producers able to survive with wheat at £60/t, he added.
Mr Page believed more favourable currency exchange rates held the key to better profits. "The £ has lost 15% of its value against the US$ this year and it could fall against the k next," he said.
"All the economic indicators are right, with growth in Britain slowing, while it grows apace in the euro-zone. But any strengthening in the k is likely to be modest, unless the market gains more confidence." Mr Page said the k could climb to about 65p over the next year. *