British farmers’ medium-term confidence is on the wane, according to the NFU’s latest survey on the subject, as uncertainty around future farm support and market outlook takes a toll.
The survey asked farmers how they rate their prospects both in the short (one year), and medium term, (three years).
Short-term confidence is still riding high, having turned a corner in the second half of 2016, following the weakening of sterling in the wake of the 23 June EU referendum.
This had the effect of making UK exports more competitive, while pushing up the price of competing imports.
But it is a different picture for the medium term, with most sectors of British agriculture now feeling more negative about the next three years.
“It is good that short-term confidence has improved, which is mainly down to better prices and higher BPS payments due to weaker sterling,” said NFU president Meurig Raymond.
“But it is disappointing that medium-term confidence has dropped, due to the inflationary pressures we are seeing with feed, fuel and fertiliser, as well as machinery parts.
“We need to have some certainty around Brexit, as without confidence we are not seeing the investment we need in infrastructure to increase our productivity and efficiency.”
On a sectoral basis, it is apparent that dairy farmers are the most confident in the immediate future, having enjoyed a year of price rises following one of the worst recessions in living memory. Poultry and mixed farms are also quite bullish about short-term prospects.
But arable farmers are particularly gloomy, according to the NFU survey, influenced in part by the rising input costs they face.
But beef and sheep farmers also have a negative medium-term outlook, driven by uncertainty about domestic demand and fears over access to labour post-Brexit.
When asked about the issues most likely to impact on their businesses over the next 12 months, farmers taking part in the survey listed input prices, regulation and Brexit as the three most negative things.
But a more positive effect would come from a greater tendency among the public to consume British produce, and there is still some optimism about future farmgate prices.