Arable incomes back to black

Net farm income before subsidies should be back in the black this year for combinable crop farms provided prices remain firm, says accountant Hardcastle Burton.

The Hertfordshire firm predicts combinable NFI before subsidies will recover to almost £100/ha (£40/acre), based on a gross margin of about £700/ha (£280/acre). This compares with a negative figure for all arable farm and soil types in the survey last year.

Average farm size in the survey was close to 243ha (600 acres) and by mid-September, 41% of feed wheat and 29% of milling wheat on the 80 farms surveyed had been sold. Average selling price was £133.43/t ex-farm for feed wheat and £143.83/t for milling wheat. The proportions sold were far higher than last year but not quite as high as in 2008.

However, more than half the oilseed rape had been sold by mid-September this year compared with 38% a year earlier and 27% in 2008.

Wheat yields on the predominantly mixed to heavy Grade 2 soils, at 8.35t/ha (3.38t/acre), were down 6.5% on 2009 output, although this masked great variance between farms even within the same land type group, said the report.

Barley yields however at 7.09t/ha (2.87t/acre), were at or even above the normal average. Light land was the only category to see an oilseed rape yield increase.

With an increase in profits likely for most, partner Jonathan Tulloch cautioned against farm machinery being the obvious choice for investing profits. Existing diversification enterprises often yielded a better return on capital employed, he said.

Combinable crop farm income forecast – 2010 harvest

Source: Hardcastle Burton