BPS reduction chart

farmerm

Member
Location
Shropshire
What happens in 2028 when fertiliser and feed will be 350£a ton, are sheep going to be 150 and cattle 2 grand, they'll need to be. Or are hill place going to get 100£a hectare for permanent pasture and wetlands, moss.
No, many hill farms are now fudged. Those whos farm incomes are highly dependent on BPS need to start taking the challenge ahead very seriously. We are not only loosing BPS but the doors are now open to free trade imports from the globe. Beef and lamb will happily flood in from elsewhere at the right price. Whilst we may see a small domestic price increase the reality is cost of production is much lower in other parts of the world and availability of imports will restrict any price rises to levels well short of replacing BPS. Lets also remember that the retail price of lamb and to a lesser extent beef, is already at the upper range of what consumers will pay when a family sized chicken can be found for £4.
 

midlandslad

Member
Location
Midlands
still not heard from our agent , thought they might have contacted me by now offering a reduction :unsure:

Whilst BPS is reducing say 50% over the next 3 years (rent review cycle) say £40/acre, this is only a £15/tonne reduction in wheat prices, which when you can get £170/t for harvest 2021 is hard to justify a rent reduction.
 

Farma Parma

Member
Arable Farmer
Location
Northumberlandia
Whilst BPS is reducing say 50% over the next 3 years (rent review cycle) say £40/acre, this is only a £15/tonne reduction in wheat prices, which when you can get £170/t for harvest 2021 is hard to justify a rent reduction.
Thats the current challenge we face. But its all relative over say a 5yr period.
Who's putting money on it not staying above that magic £150/t for the next 3 yrs?
In any case the BPS lowers steadily but most other inputs increase year on year.
Then the weather has the final say regardless.
In now my 34th year of farming ive not once seen a record harvest & high prices at the same time.
of course there is those who will always say you should have not sold it that year or whenever.
Try stopping the Bills coming in & telling them inc your LL to waver the rent until you have the income.
It doesnt work like that tho.
In arable farming there is only 2 inputs i can think that move up n down according to wheat prices say & other demands & thats Fert & Oil
Every other single input increases annually
 
Correct ewe feed 278 aton today, what will it be in 5 years time?, 300+ some excuse to put it up every year, there will need to a upland area direct payment in the future, not just lfass, and prices will need to be 120 £ for sheep, fat and 2000£ for cattle by then if ordinary farms are to survive, most farmers would rather have a good price for grain, milk, beef and lamb than sub anyways, but look at the news the government sub most industries one way or another.
 

Mixedupfarmer

Member
Location
Norfolk
Whilst BPS is reducing say 50% over the next 3 years (rent review cycle) say £40/acre, this is only a £15/tonne reduction in wheat prices, which when you can get £170/t for harvest 2021 is hard to justify a rent reduction.
Can't get £170 for harvest 2021 here, let alone selling three years forwards, few if any farms can grow just wheat, all inputs are rising seemingly out of control. Which agent do you work for?
 

midlandslad

Member
Location
Midlands
Can't get £170 for harvest 2021 here, let alone selling three years forwards, few if any farms can grow just wheat, all inputs are rising seemingly out of control. Which agent do you work for?
I am merely thinking of what the landlord's agent will be firing back at you if/when you ask for a rent review.

I assume that is must be possible to work out the base rent payable based on all the farm being in a wildlife offer scheme less costs plus what is left of the BPS?
 

Mixedupfarmer

Member
Location
Norfolk
Is all gone quiet on the so called retirement payout . I thought they were publishing details in October
Think they said November so no tenants could give notice by 11th October to exit in 2022, and the payment won’t make enough difference to many owner occupiers with current land values, so there won’t be much interest in the scheme?🙄
 

Hindsight

Member
Location
Lincolnshire
Can't get £170 for harvest 2021 here, let alone selling three years forwards, few if any farms can grow just wheat, all inputs are rising seemingly out of control. Which agent do you work for?

I just caught sight of your post from March 12th in reply to Midlands lad - you were taking a tenants view of rental direction wheras Midlands lad was taking a somewhat different view. Well we are now 7 months on and we can look back with the benefit of hindsight! And lo £170 was achievable for 2021 harvest and wheat is currently nearer or exceeding £200. And one can lock in those prices for 2022 and possibly 2023. Input prices definitely on way up. Be interesting if you and Midlands Lad struck up the conversation again. Where do you think rents are going to settle at - does BPS reduction coming along actually have an impact? Fascinating times (as always).
 

jendan

Member
I just caught sight of your post from March 12th in reply to Midlands lad - you were taking a tenants view of rental direction wheras Midlands lad was taking a somewhat different view. Well we are now 7 months on and we can look back with the benefit of hindsight! And lo £170 was achievable for 2021 harvest and wheat is currently nearer or exceeding £200. And one can lock in those prices for 2022 and possibly 2023. Input prices definitely on way up. Be interesting if you and Midlands Lad struck up the conversation again. Where do you think rents are going to settle at - does BPS reduction coming along actually have an impact? Fascinating times (as always).
I think most agents will be trying to push up rent reviews to the highest level ever.All production is selling at record prices across the board. They wont be able to help themselves. Short term grass lets as well,of which you would think there will be unprecedented demand next Spring. "we cant afford fertiliser for grassland,we will just try and rent some in instead", will be talked about across kitchen tables throughout the country.
 

midlandslad

Member
Location
Midlands
There is so much volatility at the moment, it is difficult knowing which way the rental market will go. Whilst output prices have probably increased by over 20% in recent months, so have the inputs. The great casino of farming is becoming ever more expensive to stay at the table.

The real uncertainty is whether we are in a short term honeymoon period now, or whether this is the new normal. I can't help but look at some of the price graphs and think what goes up must come down, both in terms of inputs and outputs.

Has the margin in farming remained relatively static and the cost of getting there got even more expensive, in which case there probably isn't a case for a rent increase on AHA land.

I have no doubt that FBT rents will get stronger and stronger as people chase the acres to achieve those economies of scale.
 

DrWazzock

Member
Arable Farmer
Location
Lincolnshire
I’m very glad I don’t have scale at the moment. Very glad I don’t need a lot of inputs or to replace machinery. It’s about exposure to risk. The bigger the agricultural business, the more risk you take you on and the bigger the swings in turbulent times. Scale is alright in stable times but can suck up cash reserves to critically low levels in turbulent times. It’s turning into a casino.
 

B'o'B

Member
Arable Farmer
Location
Rutland
If one of the big 3000a - 6000a - 10000a operations that have been competing to hover up land in the last decade decides to call it a day in an area, I can see it putting a real downward pressure on FBTs in that locality, as a lot of land would come up for rent in a short time. Most of the owners have sold their kit and aren’t going to start farming it themselves again, and I don’t see many people with a big thirst to massively expand that haven’t already done so.

At the minute they could put it all into stewardship with relative ease, but that option looks like disappearing as a whole farm scheme as things stand in post 2024.

Lots of risks all around right now and I think we are seeing a long term ratcheting up of those risks right now, and it feels like Ag has very few friends in high places that might offer meaningful help with that.
 

Steevo

Member
Location
Gloucestershire
If one of the big 3000a - 6000a - 10000a operations that have been competing to hover up land in the last decade decides to call it a day in an area, I can see it putting a real downward pressure on FBTs in that locality, as a lot of land would come up for rent in a short time. Most of the owners have sold their kit and aren’t going to start farming it themselves again, and I don’t see many people with a big thirst to massively expand that haven’t already done so.

At the minute they could put it all into stewardship with relative ease, but that option looks like disappearing as a whole farm scheme as things stand in post 2024.

Lots of risks all around right now and I think we are seeing a long term ratcheting up of those risks right now, and it feels like Ag has very few friends in high places that might offer meaningful help with that.

Don’t forget that not all of that land will be on the same length agreements so won’t all come back to the market at the same time.

There’s also nothing to stop the local 3000ac guy trying to expand and take some from the 10000ac guy. An auction can run and run with just two bidders.
 

farmerm

Member
Location
Shropshire
I’m very glad I don’t have scale at the moment. Very glad I don’t need a lot of inputs or to replace machinery. It’s about exposure to risk. The bigger the agricultural business, the more risk you take you on and the bigger the swings in turbulent times. Scale is alright in stable times but can suck up cash reserves to critically low levels in turbulent times. It’s turning into a casino.
Very much turning into a casino and one where the potential winnings remain modest but the stakes required to play go up and up
 

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