Farmer confidence in the dairy and livestock sectors has risen over the past year thanks largely to the fall in the value of sterling, increased commodity prices and exports, an NFU poll reveals.
However, confidence has fallen in the horticulture and poultry sectors amid serious concerns about the prospect of labour shortages in future and the effect of the increase of the national living wage on farm businesses.
Most arable farmers have a negative outlook for the year ahead, the 2016 NFU Farmer Confidence Survey showed.
Meanwhile, the Brexit vote on 23 June has dented some farmers’ confidence for the next three years, the poll found.
The uncertainty over the future of British agricultural policy and trade arrangements with the EU and third countries have dampened spirits.
Members told the NFU they anticipated positive effects on their business in 2017 from the consumption levels of British produce (58%) and output prices (46%).
But farmers feel input prices will have the most widespread negative impact for the coming year (74% negative), followed by regulation and legislation (53% negative).
Farm lending requests up
The survey also showed an increase in requests for borrowing over the past two years, with 42% having requested some form of lending.
Member confidence in bank support for future borrowing, however, is at its lowest level since 2013.
On a more positive note, the survey found the popularity of renewable energy diversification has grown steadily over the past three years, from 30% in 2015 to 35% in 2016, with solar electricity and biomass heating the two most popular methods.
NFU president Meurig Raymond said: “The NFU has made it clear that for farming to have a profitable and productive future we need reassurance on key issues resulting from Brexit; such as access to a competent and reliable workforce and the best possible access to the EU single market.
“It is clear that farm businesses still remain under pressure and this survey demonstrates a dependence on borrowing from banks which is concerning.”
The survey polled 665 NFU farmer and grower members between 18 October and 25 November 2016.