All eyes on currency values
By Robert Harris and James Garner
MARGINALLY better – but only for those with the skill and determination to succeed is how Francis Mordaunt, partner at farm business consultant Andersons, sums up farmings prospects for next year.
In the Outlook 2002 report launched at AgriVision this week, total income from farming is predicted to exceed 2bn, only a slight improvement on this years 1.8bn.
“The fundamental problem is likely to remain the strong Pound,” says Mr Mordaunt.
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But exchange rates are unlikely to improve much next year, he predicts. “We continue to budget at 1=62p.”
The damage wrought by this adverse exchange rate on UK support and farm prices is all too obvious.
One big unknown is how currency markets will react to the physical introduction of the Euro on 1 January.
“Some see the possibility of a peoples revolt against the dropping of national currencies – this would be disastrous because the Pound would strengthen even further,” he says.
“But the opposite effect is also possible.”
Dairy farmers will struggle to maintain the improvement seen recently, and although beef producers will benefit from larger subsidy cheques, cattle prices are uncertain.
The outlook for sheep also remains precarious. “But, if things swing the right way, and foot-and-mouth disappears, then producers could have a better year than we dare hope,” says Mr Mordaunt.
Arable price prospects are better next spring than last, with feed wheat worth 75-80/t. But the longer-term outlook is more volatile, depending on world market movements.