At the end of July, yields for the 2011 crop were expected to be down following another dry summer, but later rains and excellent lifting conditions mean the UK crop could be in store in record time, with yields generally in line with recent averages.
“This will do nothing to help the prospect of a further year of depressed prices,” says Jay Wootton.
“Some years ago we suggested that a more professional approach to growing could force out the marginal producer. Over the past 10 years the grower base has shrunk, with production relatively unchanged, and the competition for rented land continues unabated.”
The difference in cost of production continues to grow between large-scale, highly mechanised growers, renting land and storage, and those who continue, through historic investment, to support the buyers’ position by selling at a level which does not allow for future reinvestment, he says.
“However, the discipline of processors in recognising increasing costs must be noted, and this has resulted in far greater market stability and grower commitment in this sector than in the general fresh market.”
• Early harvest and good crops weighing on prices
• Competition for rented land remains fierce
• Cost of production levels widening
* Commentary for this article is based on Andersons’ Outlook 2012. Copies can be obtained free of charge by calling 01664 503200 or it can be downloaded from the Andersons website – see ‘Publications’.
* The Andersons Centre will be running its popular series of spring seminars on the prospects for UK agriculture in more depth at locations around the UK in spring 2012. These briefings are aimed at farm business managers as well as professionals working with companies in the agricultural sector. Detailed overviews of each of the main sectors of UK agriculture will be covered as well as comprehensive discussion of the latest agricultural policy developments. For details go to the Andersons Centre.