Farm incomes to get worse before better
11 February 1998
Farm incomes to get worse before better
By FWi staff
FARM incomes this year will plunge to their lowest depths for almost a decade, a major high street bank warned yesterday (10 February).
Barclays Bank forecasts a 39% drop in farm incomes during 1998. But the agricultural sector will stage a partial recovery soon afterwards.
UK net farm income this year will fall to £1.7 billion, the bank predicts. However, a slow but steady rise in incomes will begin in 1999.
The immediate downward trend in incomes will continue, largely because of uncertainty on the European currency markets, according to the banks analysts.
Sterling is likely to remain strong in run-up to European Monetary Union, said John Page, head of Barclays Agricultural Services.
“There is little doubt that farmers are suffering their lowest income levels for almost a decade and that 1998 will provide little relief for most of them.”
World grain prices will remain weak as production outstrips demand, Mr Page added. Milk prices are also set to stay in the doldrums.
Mr Page forecast that the agricultural sector will bottom out this year before incomes start to increase next year as economic conditions change.
“The newly established Euro-currency should begin to gain strength early in 1999 as fact replaces uncertainty,” he said. “This will increase the value of existing EU payments to British farmers and make their produce more competitive in the market place.”
An increase in global grain consumption and improved livestock prices will also help spark a 12% rise in farm incomes throughout 1999, Mr Page added.
But even then, farmers will have suffered a 42% pay cut since the boom year of 1995.
What the papers say, today (11 February) – Click here