I sold another 300t of my 2010 harvest today, and while entering the details in my diary, I realised that I made almost exactly double that from my first chunk back in late 2009.
However, the flipside of higher commodity prices came home to roost when I had to order a load of sheep nuts for the lambing flock. While we took some cover for the winter feeding period, we need to do a certain amount of spot buying. The pig and poultry sectors are taking the brunt. A pig farmer recently told me he was losing £12 per finished pig. With no downturn foreseeable in feed prices, this is unsustainable in the long term, and another contraction in pig and poultry numbers could be on the cards, which will lower the demand for home-produced feed grains.
Concerning our arable production costs, the biggest threat is the relentless rise in fuel prices, which has a knock-on effect on many other inputs needed for crop production. For example, we are paying close attention to our machinery running expenses. We are sticking to our policy of moving tractors on at 5000 hours maximum and will shortly have all the tractors covered under extended warranties.
We are also in discussions with our dealer, PHR Rayne, to provide fixed-price servicing packages to cover the tractors for the entire 5000-hour period. This will enable us to ringfence our tractor running costs and implement risk management into another area of our production costs. A 400hp tractor on a neighbouring farm recently suffered a major breakdown and was not long out of warranty, leaving a very expensive repair bill. This incident further resolved my wish to remove some of the risk and exposure I was under.
Farmer Focus Arable: Robert Law