30 June 2000

Hard going in north with fall in profitability

By Nigel Burnham

FARM profitability in Englands four most northerly counties fell by more than 160% in the year ending between Dec 31, 1998, and Apr 30, 1999, according to new figures published by the Farm Business Survey unit at Newcastle University.

Reflecting the poor lamb prices and harvest in 1998, the figures, based on a survey of 180 farms, show that profitablity for all types of farms in Northumberland, Cumbria, Durham and Tyne & Wear fell for the third year running.

The average drop in management and investment (MII) income/ha was 161%. That followed an 89% drop the previous year and a near 30% fall the year before that. The average farm in the four counties now has an MII/ha of minus £16 or a net farm income of £71/ha (£29/acre).

The survey conducted for MAFF found that the worst affected type of farm was in the lowland arable category where the MII/ha dropped from £26/ha (£10,50/acre) to minus £54/ha (-£22/acre).

Only the lowland dairy category and the hill rearing category have positive MIIs, returning figures of £78/ha (£32/acre) and £33/ha (£13/ acre), respectively.

Return on farmers investment fell to a 10-year low and cattle and sheep output during the year fell by 9% and 13% respectively. Crop output in the lowland arable group fell by 18%.

The results were described as "alarming," by Charles Scott investigational officer with the universitys Farm Business Survey. "We knew this years figures were going to be bad but we didnt realise theyd be this bad," he said.

Prospects for Yorkshire farmers seem brighter. Figures for the year ending Dec 31, 1999 to Apr 30, 2000 are unavailable. But Mervyn Lewis, head of Rural Business Research Unit at Askham Bryan College, which conducts the Farm Business Survey for MAFF, senses a small improvement. "I think our figures will show that there has been a very modest improvement in Yorkshire over the last year," he said.

"Prices were not particularly strong in the year but there were very good yields and there are signs that the beef sector fared a little better."

But it was a difficult year for potato growers and there was significant decline in the dairy and pig sectors, pointed out Mr Lewis.