This year’s total income from farming could be £1bn lower than last year’s £5.7bn, according to the latest edition of The John Nix Farm Management Pocketbook.
The latest edition (43rd) of the industry bible contains a note of caution from Professor Nix warning that profits in UK agriculture are under pressure.
“It is critical to manage all parts of the business in detail, not just the main categories. This is one area where tools like the Pocketbook can be very useful to identify where costs are higher than they should be,” said Prof Nix in his foreword to the book.
And those farmers who will be worst hit include those whose crops have been badly damaged by the incessant rain this summer and dairy farmers who have suffered a sharp milk price cut.
Varying costs of production
For the first time ever the book has outlined dairy gross margins in three different schedules – spring-calvers, autumn-calvers and all-year-round-calvers.
All-year-round calving herds incur nearly 3p/litre more costs than spring-calving herds, while the costs involved in autumn-calving herds lie between the two other systems, the book suggests.
“It is critical to manage all parts of the business in detail, not just the main categories. This is one area where tools like the Pocketbook can be very useful to identify where costs are higher than they should be.”
As a result of these varying costs of production, processors will continue to require flat milk profiles from their suppliers to maintain a premium of at least that level to ensure supply in the long-term.
Livestock producers can also take advantage of a new schedule in the book which provides an analysis of livestock haulage – it takes an average sixed stock-box attached to a standard 4WD vehicle and calculates the cost of short and long distance haulage of ewes, lambs and cattle.
Feed wheat returns to top spot
For arable growers, the book budgets feed wheat returning to the top position after last year’s pocketbook budgeted that oilseed rape crop would outstrip feed wheat gross margins.
There is only a £17/ha difference between the two for the 2013 harvest, with gross margins for feed wheat at £776/ha and winter oilseed rape at £759/ha. And while final gross margins will vary greatly, their comparative levels ahead of drilling are important as a guide for growers when deciding on their rotations.
Since the book was printed, 2012 harvest prices have risen by around £20/t and £50/t since June, but many farmers will see this gain being offset by lower yield and crop quality following the wet weather this year.
See more on the milk price cuts