Ag Subsidies

[digger64]

Would you like to describe the 'extra sub related costs', please?

I can't see any.

The typical LFA livestock farm rents roughly half its land (about 150 acres) and owns the rest, so that if (because of a fall in profitability) rents fell from £70/acre to £40/acre that farmer would 'save' annually £30/acre x 150 acres = £4,500 but lose £300/head on 100 fat beasts = £30,000. The figures are even worse for lambs.

Perhaps you can advance figures to demonstrate how your business would benefit, when mine would not?

(In practice, in West Wales, the land would be fought over by dairy farmers and the rent would not fall).

Extra fencing -not
allowed to spray electric fences , low silage yields and quality due to hls restrictions ,weeds poorer weaning weights and feed costs incurred to make up , fluke issues lower fertility cow condition etc , more acres needed per head so more miles traveled etc , shorter grazing season - more winter forage needed , if the bulls are not finshed by 14 months loss of bonus if 16 months loss of outlet -feed costs etc.Extra working capital required to finance paying sub to landlord in the form of rent (sub+land value rent formula) therefore to take unrestricted land of any quality is very expensive but thats the same everywhere I know .At the moment
sub received on occupied land is about £25 per acre I think if sub was removed land costs would fall alot more than this so not much to loose but to gain ?


I dont know wether your business would benefit or not but I think at that rent level you must have a secure tenancy on reasonable land your sub pays your rent , I was thinking £200 less income per head you worked on £300 , I'm guessing now but I suspect that if you had to pay an open market rent you would need to be milking cows to pay it and your thoughts would be closer to mine then

 

[Bossfarmer]

Would you like to describe the 'extra sub related costs', please?

I can't see any.

The typical LFA livestock farm rents roughly half its land (about 150 acres) and owns the rest, so that if (because of a fall in profitability) rents fell from £70/acre to £40/acre that farmer would 'save' annually £30/acre x 150 acres = £4,500 but lose £300/head on 100 fat beasts = £30,000. The figures are even worse for lambs.

Perhaps you can advance figures to demonstrate how your business would benefit, when mine would not?

(In practice, in West Wales, the land would be fought over by dairy farmers and the rent would not fall).

finally someone producing some sorts of figures to back up their point

 

[Bossfarmer]

He also probably gets a third of the rainfall and a third of the yield and of course a third of the variable costs. It's all relative!

Round these parts if they average 4t/ha of wheat they're content. If, as with last year, they average 6t/ha they hardly know what to do with themselves! There are low rainfall areas (circa 300mm) in my patch that can run their business on 1t/ha or just not plant a crop in bad years. It hurts, but they can do it.

As for storage, most will have some form of short term on farm storage, some have longer term storage.

Grain won't be dried but the dry weather brings its own problems, harvest bans during hot and windy periods, straw/hay too brittle to bale due to low humidity or, as happened here 2 years ago, fire can wipe out entire regions. We lost an area the size of Dartmoor in less than 24hrs, much of it with standing crop. Very scary!

So there's a lot more to it than scale I'm afraid.

without scale it wouldnt work though would you not agree? can you make a living off 200 acres of grain out there? lets say they can get 1.5t/acre over 10,000 acres thats 15,000t, most people in uk sell less than 1,000, helps

 

[Bossfarmer]

Extra fencing -not
allowed to spray electric fences , low silage yields and quality due to hls restrictions ,weeds poorer weaning weights and feed costs incurred to make up , fluke issues lower fertility cow condition etc , more acres needed per head so more miles traveled etc , shorter grazing season - more winter forage needed , if the bulls are not finshed by 14 months loss of bonus if 16 months loss of outlet -feed costs etc.Extra working capital required to finance paying sub to landlord in the form of rent (sub+land value rent formula) therefore to take unrestricted land of any quality is very expensive but thats the same everywhere I know .At the moment
sub received on occupied land is about £25 per acre I think if sub was removed land costs would fall alot more than this so not much to loose but to gain ?


I dont know wether your business would benefit or not but I think at that rent level you must have a secure tenancy on reasonable land your sub pays your rent , I was thinking £200 less income per head you worked on £300 , I'm guessing now but I suspect that if you had to pay an open market rent you would need to be milking cows to pay it and your thoughts would be closer to mine then

a lot more folk will be milking cows if subs go so competition for land will keep rents up

 

[caveman]

a lot more folk will be milking cows if subs go so competition for land will keep rents up

Utter delusion.
Why aren't a lot more milking now with the safety net of payments?

 

[lazy farmer]

a lot more folk will be milking cows if subs go so competition for land will keep rents up

assuming they can get a contract.

 

[lazy farmer]

Utter delusion.
Why aren't a lot more milking now with the safety net of payments?

well he would have as much time to post on here. silver linings

 

[Bossfarmer]

Utter delusion.
Why aren't a lot more milking now with the safety net of payments?

they dont need to, look at NZ after subs went........dairy expanded, beef & sheep moved onto the poorer land

 

[caveman]

There must be thousands of suitable "mothballed" units up and down the country......that would be in full production now if there was any mileage in the job.

 

[caveman]

they dont need to, look at NZ after subs went........dairy expanded, beef & sheep moved onto the poorer land

Where are you going to sell all this extra milk?

 

[Bossfarmer]

There must be thousands of suitable "mothballed" units up and down the country......that would be in full production now if there was any mileage in the job.

lack of scale you need to be big enough to milk at least 150 cows now of which many farms are, the big dairies are always expanding too so any cheap ground will be snapped up, rents not a big cost to these guys

 

[Bossfarmer]

Where are you going to sell all this extra milk?

where do nz sell theirs they have a bigger landmass than us and a 10th of the people? good export agreements will be essential if subs are removed

 

[caveman]

lack of scale you need to be big enough to milk at least 150 cows now of which many farms are, the big dairies are always expanding too so any cheap ground will be snapped up, rents not a big cost to these guys

The nett cost of land will be the same, if not more, post payments.

 

[Bossfarmer]

The nett cost of land will be the same, if not more, post payments.

so your agreeing?

 

[caveman]

so your agreeing?

The nett cost of the land will be the same as now......If not more.
It would make your proposal even less attractive than it is now.

 

[Kiwi Pete]

they dont need to, look at NZ after subs went........dairy expanded, beef & sheep moved onto the poorer land

It sure didn't happen overnight, the dairy expansion part at least.
But that was 1984 and average herd size then was mini, to say the least - dairy expanded off it's own bat

Bring back the Co-op!!

One co-op!!!!

The main thing I see - of course I'm blinkered by largely reading TFF - is so much division and competition; the equivalent of trying to run ewes and lambs together and wondering why performance suffers. You guys have to unite

Divide and conquer....

 

[Kiwi Pete]

Where are you going to sell all this extra milk?

20ppl does not indicate a huge demand for milk. Hence the comment about unity, and the strength in doing so; here, sure we have smaller processors too - but the driver is that beast that is Fonterra.
Farmer born co-op and a lot of spending on creating value-added products - I don't see any barrier to the UK doing exactly the same? Other than COP possibly but there is plenty of AMF and powder on the world circuit - more high end products like specialist cheeses and casein though...

 

[BLG]

where do nz sell theirs they have a bigger landmass than us and a 10th of the people? good export agreements will be essential if subs are removed

Not quite true, NZ has a smaller landmass and far less farmable land.

Re export agreements, totally agree, this is where a lot of our industries and governments efforts go to, reducing tariffs or free trade agreements.

 

[BLG]

it made for the highest rate of farm suicides in the world and industrialised sized farms, is this good or bad? animal welfare has been mentioned on here before and 1 labour unit for 2000 sheep does not equal high welfare standards, looking at it purely from business point of view it may have improved NZ but animals and people are living creatures

Since the '80s the sheep breeding has moved to composite easy care sheep that look after themselves well, lambing etc, so 1 labour unit to 2000 has no animal welfare problems, in fact I think the average is higher than that.

 

[Walterp]

Extra fencing -not
allowed to spray electric fences , low silage yields and quality due to hls restrictions ,weeds poorer weaning weights and feed costs incurred to make up , fluke issues lower fertility cow condition etc , more acres needed per head so more miles traveled etc , shorter grazing season - more winter forage needed , if the bulls are not finshed by 14 months loss of bonus if 16 months loss of outlet -feed costs etc.Extra working capital required to finance paying sub to landlord in the form of rent (sub+land value rent formula) therefore to take unrestricted land of any quality is very expensive but thats the same everywhere I know .At the moment
sub received on occupied land is about £25 per acre I think if sub was removed land costs would fall alot more than this so not much to loose but to gain ?


I dont know wether your business would benefit or not but I think at that rent level you must have a secure tenancy on reasonable land your sub pays your rent , I was thinking £200 less income per head you worked on £300 , I'm guessing now but I suspect that if you had to pay an open market rent you would need to be milking cows to pay it and your thoughts would be closer to mine then

Interesting points.

On income from fat cattle, AHDB recently suggested a decrease of 45% (my figure of £800/head comes from the US, it's about £500/head in BA - Sterling at pre-Brexit levels) so that I would suggest you re-visit your accounts and substitute first one (a FTA with the US) and then the second (FTA with the ROW).

Your income projections are very optimistic, unless you are banking on the UK remaining in the SM and CU. Neither is a definite prospect; in fact, some assessments suggest the opposite right now.

In a high cost UK land district, I suggest beef and lamb is a non-starter. Our seasonal lets are £70/acre.