Real price drops bigger than farmers forecasts: Survey
By Tim Relf
You have to look hard to find a farmer who hasnt been surprised by the rate at which agricultural fortunes have declined over the past year.
So concludes NatWest Bank, announcing the results of its Farming Forecaster of the Year competition.
A sample of more than 200 people questioned in Nov 1996 predicted, for example, that milk prices would fall just 1p/litre from their then level of 27p/litre over the next 12 months. In fact, they dropped to 23.3p/litre.
It was a similar story with finished sheep and pigs, with farmers underestimating the extent by which values would drop.
In the case of beef, an anticipated price recovery failed to materialise. The belief was that finished steer values would recover from 94p/kg to 105p/kg – but the figure edged only marginally up to 96.3p/kg.
Milk quota, meanwhile, fell in value more than expected. Leasing samples dropped from 17p/litre to 9.5p/litre, compared with the 1p/litre drop suggested.
The two farmers who were nearest the mark – and who shared a first prize of £250 – were Andrew Friend and Brian Deane.
"Realism not pessimism," said North Devon-based Mr Friend of his predictions. He reckons the trough has now been passed and grain prices and milk values could edge up over the next year.
But Staffs beef producer Mr Deane believes theres little scope for improvement in this sector. "I hope Im wrong, but I dont see any reason for the beef export ban to be lifted in the next five years."
The artificial base in calf prices remains, courtesy of the slaughter scheme, says Mr Deane. "Because of this its costing me more to buy calves now than before the crisis."
Finished pigs (p/kg)10510383
Finished lambs (p/kg114113107
Milling wheat (£/t)117111105
Feed wheat (£/t)1009682
Feed barley 989376
Green rate (1ecu=£)0.8340.840.696
Source: NatWest Bank