Does Farming Benefit From A Recession?

[Robigus]

Looks like the economy might be on the up.
http://www.thetimes.co.uk/tto/business/economics/article3859221.ece
But recessions often lead to a rise in commodity prices as investors look to earn something away from dead stock markets.
Will they now dump commodities and return to shares?
Nov '14 and Nov'15 wheat futures are still at around £150, I can make a living at £150; as the economic cycle turns will we look back at those as having been good value?

 

[roscoe erf]

Not that I have seen

 

[RobFZS]

Dunno about that, but seems to be alot of sheds going up recently

 

[rob1]

From my experience farming seems to do better during a recession, not sure if the figures bear that out or if we just feel better off when everyone one else is not doing so well

 

[Yale]

Haven't noticed any fewer Range Rovers around here.

Recession,what recession?

 

[Y Fan Wen]

Haven't noticed any fewer Range Rovers around here.

Recession,what recession?

They're only running them in for the bank manager!

 

[snowhite]

Haven't noticed any fewer Range Rovers around here.

Recession,what recession?

the prince of wales gets paid for the family job as well as farming

 

[grumpy]

historically farming has benefited more from a war than anything else and that goes back to the napoleonic wars.

 

[snowhite]

banks and government's looked on farming as a safe bet when everything else goes belly up

 

[rob1]

the prince of wales gets paid for the family job as well as farming

Actually no he doesnt his income comes from the duchy estate and has to cover all his costs, not that he is hard up mind

 

[snowhite]

Actually no he doesnt his income comes from the duchy estate and has to cover all his costs, not that he is hard up mind

i was thinking he could afford oats for the horse

 

[Walterp]

Hmm, don't want to make myself unpopular, but is there really an economic upturn?

True, government spending nearly everywhere has increased, in order to support national economies, but is that a positive development? Or a negative one? I'd suggest that the global debt crisis (which is, I think, what is actually going on) continues apace, with pressure increasing either on interest rates, or inflation, or both. The medium term outlook must, I suggest, be negative.

Answering the question, I doubt that financial speculation has much, if anything, to do with commodity prices; with demand strong, and rising, price fluctuations are almost always linked to supply issues like weather, wars, etc etc.

So it doesn't matter much if there's a recession or a boom, it's the underlying physical trading conditions that matter.

 

[snowhite]

Hmm, don't want to make myself unpopular, but is there really an economic upturn?

True, government spending nearly everywhere has increased, in order to support national economies, but is that a positive development? Or a negative one? I'd suggest that the global debt crisis (which is, I think, what is actually going on) continues apace, with pressure increasing either on interest rates, or inflation, or both. The medium term outlook must, I suggest, be negative.

Answering the question, I doubt that financial speculation has much, if anything, to do with commodity prices; with demand strong, and rising, price fluctuations are almost always linked to supply issues like weather, wars, etc etc.

So it doesn't matter much if there's a recession or a boom, it's the underlying physical trading conditions that matter.

the one good thing is less people are talking about how bad they are , and the ones that did the most are the ones in the jobs that are never hit ,

 

[IANTO]

Looks like the economy might be on the up.
http://www.thetimes.co.uk/tto/business/economics/article3859221.ece
But recessions often lead to a rise in commodity prices as investors look to earn something away from dead stock markets.
Will they now dump commodities and return to shares?
Nov '14 and Nov'15 wheat futures are still at around £150, I can make a living at £150; as the economic cycle turns will we look back at those as having been good value?

To answer the question "Does Farming Benefit from a Recession".

It depends on whether the "Recession" is confined to the UK, or a "Global Recession", when in theory at least, exchange rates between currencies remain roughly the same.

Farm Incomes for 2013 - 2014 will probably be down 5% in the UK.

The perceived recovery by the Markets has Strengthened the £ against most other Currencies.

Those who have not bitten the bullet, taken their SFP in Euros and fixed their Rate at 87P, are probably looking at a "Green Pound" rate fixed on the 30th September somewhere between 84p and 83p or possibly lower.

The strength of the Pound, also has a knock on effect on both imports and exports.

For Grain Growers, the rate against the US$ is still better than 12 months ago, and ignoring any increase in the Global Price of Grain, on the exchange rate alone (depending if they Sell Forward or have fixed a price now), should be better off. Those who have not fixed prices or sold forward, might find themselves competing with other Grain Producers, whose exchange rate is more favourable to they buyers. (More for their money.) For these at present, there are too many unknowns. Depends on the Harvest in other Countries, and whether China is still the main Buyer on the World Market.

For Milk Producers, the strength of the pound means that the Major Buyers, can import cheaper than buy in the UK. Downward pressure on the Domestic Milk Price. A price cut for Dairy Farmers.

For Livestock Producers, both Beef and Sheep, as a large percentage of their produce is exported, the strength of the pound, makes them less competitive,
and again unless in a Niche Market, a downward pressure on prices.

I will stick my neck out, and suggest, that Grain Growers will hold their own.

Livestock and Dairy Farmers, will be worse off.



4

 

[Walterp]

But if you also factor in supply problems in UK beef and dairy markets, with buyers actively chasing more product, that may balance things up....

 

[IANTO]

But if you also factor in supply problems in UK beef and dairy markets, with buyers actively chasing more product, that may balance things up....

Makes you wonder, if they used to pass a lot more Horse Meat off as Beef.

What else explains the increase in demand?

 

[exmoor dave]

apparently horse slaughtering's in Ireland are down over 85%, makes you wonder how much and how long it was going on for? and how far up the chain people knew about it?

 

[snowhite]

do they have a horse factory in Ireland

 

[IANTO]

do they have a horse factory in Ireland

I thought you were from Ireland and from a farming background.

It is only children from cities, who could possibly believe that Horses were produced in Factories.

 

[snowhite]

I thought you were from Ireland and from a farming background.

It is only children from cities, who could possibly believe that Horses were produced in Factories.

i still love ya ,