Grass-keep price drop expected…
By Tim Relf
GRASS-KEEP prices are expected to be down on last year, when deals are done in the next few weeks.
"Everyone wants to give less for it than last year," says McCartneys Glyn Owens.
Well fenced ground with water and easy access will be most sought after. And demand will come from farmers keen to maintain their forage area and subsidy payments, says Mr Owens.
But for dairy producers, the IACS payments are an irrelevance, points out Chris Turney of Hamiltons.
Top-priced keep – last year worth about £120/acre – will be 20% down, suggests Mr Turney. At the bottom end, agreements will probably settle about 10% down on last years £40/acre.
Lower farm incomes are the reason, with dairy farmers, for example, having seen a 3-4p/litre drop in milk prices over the past year. "Farmers are looking to be cautious, tighten their belts and cut costs," he says.
"But for some this presents a dilemma: They need to keep costs under control, but they also need extra fodder if they have more dairy replacements coming through, following the switch from beef to dairy inseminations."
Sward quality is important, because good grass will grow better if there is a drought.
Most agreements see occupation from April, so a lot of deals will be done through April.
Richard Nancekivell of David James and Partners, reckons values will be about £10-£15 back on 1997, when £70/acre was typical.
"The key is how many more acres come available, and some people may offer grass-keep that do not wish to buy cattle to fatten themselves."
But a bottom will be put in the market as farmers, keen to claim extensification and super-extensification payments, look to expand their forage area. "When margins get squeezed, it is that extra bit of subsidy that is chased."
Phil Blackman of Bruton Knowles says rates are not much less than last years. "A lot is let between the same people every year, so the market does not move much." Deals have been done between £40 and £80/acre," says Mr Blackman.