Farmer Focus: Margin re-calculation reveals shocking figures

Current market volatility places a greater importance on gross margins to ensure we do not fall into a trap for harvest 2022 or 2023.

I say this with both the loss of margin potential for 2022 and loss of margin for 2023 in mind.

We recently re-calculated our margins. The figures are telling us the current crop in the ground could well be the most profitable one we have or are likely to grow for many years.

Fortunately, we took a hedge that it was going to be an expensive fertiliser year and bought early.

Seed and autumn crop protection products seemed good value, and establishment costs were low with our no-till system.

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The spring looks set for a 10% increase in overall crop protection costs, with diesel the most concerning factor, significantly increasing our contractors’ fees as well as our own.

But with all this said, grain prices for November 2022 look plenty healthy enough for us to optimise and maximise yield potential for all crops this spring.

This could be vital to bankroll the next crop, which is going to take considerably more cash to get from seed to a pile in the grain store.

With the rising input costs, the 2023 harvest will need a little more scrutiny between now and planting.

We could well be £250/ha adrift on our winter wheat margins between the two seasons, after factoring the new fertiliser and fuel costs along with the reduction in basic farm payments and commodity prices forecast for 2023-24.

This is quite a shocking figure, but there is still a margin to be had – and thick enough for us to carry on with our rotation as planned for the 2023 harvest.

In an ever-changing world we have just signed up to a carbon trading platform which could either be the cherry on top or the sour grape in our season! Only time will tell.

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  • Negotiate better prices with your grain merchants

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