Agents’ cheery outlook post-BPS

[AJ123]

250 isn't going to shift me off this aha , no chance . agents here have gone very quiet and we are overdue a rent review .
I know they will resist it but its got to be lowered . only thing that will shift me is a big pay off and i mean big you only get one go !

If I were them I’d be getting it in now, good prices and payments still high, risk is rents will drop, you’d think they would secure 3 years of good income now.

 

[neilo]

Your right but on this estate the aha agent started including a rental value for the house when they were running out of ideas of how to get the rents up . And yes its down to earning capacity so they need to take a share of the pain .

It’s a common tactic, but just because he thought he could, it doesn’t mean he can. Ultimately any aha tenant doesn’t have to accept that, but I appreciate it’s often easier to take it on the chin if the increase isn’t too much. If you argue it, or even threaten to take it to arbitration, they don’t have a leg to stand on.
I do appreciate that does little for landlord/tenant relationships though, and will very often end up being counterproductive.

 

[neilo]

Ok 5 years, gives them time to see how we get on, although the structural changes here won’t quite be seen by then so it might be two cycles before they make any great leaps??

Did Nige tell you that, or have you just taken a wildly hopeful guess yourself?

No doubt we’ll find out in time.

 

[Old Tup]

What’s the point?
If a farmer sells up , it’s likely to be a bigger established farmer that buys it, not a new entrant .

Why sell the land?
Someone say sixty....no one to follow on....farm bought and paid for.....enjoys living where the farm is.....some sort of Tax efficient semi retirement scheme with a tenant .....partnership...
Farm gets farmed.....previous lifestyle more or less carries on without the graft.
Just musing...

 

[Yale]

Why sell the land?
Someone say sixty....no one to follow on....farm bought and paid for.....enjoys living where the farm is.....some sort of Tax efficient semi retirement scheme with a tenant .....partnership...
Farm gets farmed.....previous lifestyle more or less carries on without the graft.
Just musing...

Yeah,and when they have got state pension and can’t spend it in a week,why take the payout?

Lifestyle in retirement or money?

I know which path I would take.

 

[Bossfarmer]

I think the agents view is interesting. Personally I don't think very large farming operations with lots of tech will necessarily be the most viable. They'd stand to lose the most from BPS alterations in total. They also tend to focus too much on one area such as arable farming which makes them very susceptible to market volatility and cash flow is what kills big businesses. I also think that the efficiency that this tech brings isn't necessarily all its cracked up to be at this scale (I'm very pro tech as well). Yes its a lower cost per acre, but the cost of implementing it on machines is still huge, generally meaning running fewer fully kitted out machines. That's all great on paper, but here's an example. Combining capacity tends to be fairly maxed out due to this (more combines, more tech duplication, fewer machines) and so in wet years they struggle to get finished. I think the biggest factor here is future climate change which could easily double or triple the required combining capacity. This capacity would be required to mitigate risk and provide resilience across the new 'average year' which would kill any minimalist hyper efficiency business model.

Personally I think it will be medium size mixed enterprises that succeed the best in a post BPS world. The natural resilience this brings along with smoothing cash flow will help greatly with increased fluctuations in yearly income from each source.

I do however think that all farming businesses need to prepare by minimising cost whilst not impacting quality and output, its all about the difference between income and expenditure. As a farm we have actively prepared for BPS reductions and as a mixed 500 acre farm this has meant so interesting decisions. The biggest has probably been switching to larger trailers. This has reduced casual labour requirements, reduced operating costs and created other benefits without impacting output. Other things can be to bring tasks in house to reduced reliance on outside help. This may not work for all, but is another possible benefit. Things like these are going to be crucial for all farms moving forward, but each will have to find unique solutions that suit them.

what size if trailers have you switched from?

 

[hutchy143211]

what size if trailers have you switched from?

Gone from 8ton grain trailers straight to a single 16 (+ 1 8ton in the field as a backup). With a tx34 it can take 4 tanks of corn compared to 2 meaning that the combine can work for an hour with no input (unless tipping on the move) allowing the spare operator to go and bale 5-6 acres in-between loads. Halves haulage, and is quicker with high speed axles etc. The other upgrade was a straw trailer from 2 25fts to 32ft and kept a 25ft. Often only use the 32ft now as it has nearly the output of 2 25fts but with only 2 operators instead of 3 (1 for the loader). Carries 20 bales of silage compared to 14, again with 50k which even on a short haul is surprising the the amount of output it adds.

 

[AJ123]

Did Nige tell you that, or have you just taken a wildly hopeful guess yourself?

No doubt we’ll find out in time.

I presume you refer to Farage, not sure what it’s got to do with him, it’s not a brexit thing, the reports I have seen suggest thinking is moving towards less area based payments across Europe.
Given we’re so closely aligned currently, they’d be crazy not. to watch and see how the new uk systems turn out., especially with the different approaches across the devolved governments.

But it will take time for the structural changes to come through, you’ve got to wait for the bps to go completely. and then people to decide how to respond and then to actually make any changes

 

[Bossfarmer]

Any thoughts?

well just that i dont remember atime in farming when it wasnt 'tumultuous' soto me its always been part of the deal
and that youre definition of small farms must be way different to mine as im a small farmer and have only ever had a fraction of that 40 k you mention.

what will be will be but there has been plenty of time for everyone to adjust , plenty of warning and signs for many yrs.

i hear this phrase a lot, time to adjust, lets say you told someone in a job their salary was going to be slashed by 60% and they may have to work 2 or 3 jobs now to get by but at least they had "time to adjust" does it make any sense?

 

[Bossfarmer]

Gone from 8ton grain trailers straight to a single 16 (+ 1 8ton in the field as a backup). With a tx34 it can take 4 tanks of corn compared to 2 meaning that the combine can work for an hour with no input (unless tipping on the move) allowing the spare operator to go and bale 5-6 acres in-between loads. Halves haulage, and is quicker with high speed axles etc. The other upgrade was a straw trailer from 2 25fts to 32ft and kept a 25ft. Often only use the 32ft now as it has nearly the output of 2 25fts but with only 2 operators instead of 3 (1 for the loader). Carries 20 bales of silage compared to 14, again with 50k which even on a short haul is surprising the the amount of output it adds.

how do you get on with a 16t trailer did you need a bigger tractor?

 

[hutchy143211]

how do you get on with a 16t trailer did you need a bigger tractor?

No we were fortunate to have a 200hp 50k tractor already that was the main heavy draft tractor. However we do also have a 155hp tractor that its been on and although slower with less hp its still more than capable. This is another side to the approach is that we try where possible to always have a redundancy so there is not reliance on a single machine.

 

[glasshouse]

No we were fortunate to have a 200hp 50k tractor already that was the main heavy draft tractor. However we do also have a 155hp tractor that its been on and although slower with less hp its still more than capable. This is another side to the approach is that we try where possible to always have a redundancy so there is not reliance on a single machine.

Who u making redundant

 

[hutchy143211]

Who u making redundant

Guess its going to be me for my spelling and grammer

 

[Bossfarmer]

At the launch of the SFP the rhetoric was all about divorcing subsidy payments from your farming activities so that you could all be prepared for those subsidies to go. That’s a long time in business to get prepared for what’s about to happen, and even now you’ve still been given notice. Any business that hasn’t reacted accordingly to those warnings has only got itself to blame.

what have you done?

 

[Bossfarmer]

250 isn't going to shift me off this aha , no chance . agents here have gone very quiet and we are overdue a rent review .
I know they will resist it but its got to be lowered . only thing that will shift me is a big pay off and i mean big you only get one go !

surely with a rent review the only way it can go is up? inflation

 

[Billboy1]

No boss down here an aha tenancy is done on the profitability of the farm , we are about to lose 90 pound an acre off the top line I'm obviously not saying it should reduce that much but yes it must come down

 

[turbo]

Here are my thoughts going forward,land that produces every year will still be farmed but elms will give you the chance to take out unproductive area’s so as not to be a drain on the rest of the farm.Contract farming agreement and the like will be a thing of the past as the money will not be there for paying agents fees! The landowners will either rent out or have contractors do the work on a per operation basis but claim elms on some of the land that cannot make money each year.That’s how I think it will go and I am very excited about the future of agriculture in the country