Farmers giving up due to Brexit?

[Robw54]

Don't forget the capital growth and tax benefits. Land price growth was £1k/acre/year for Grade 3 arable land in Lincolnshire for several years until recently.

Don't forget the capital growth and tax benefits. Land price growth was £1k/acre/year for Grade 3 arable land in Lincolnshire for several years until recently.

Buy today for 11 sell next year for 12 if only it was that easy. As usually happens all them buyers will have disappeared.

Anyone paying 18k an acre has quite honestly lost the plot unless it's due a good crop of houses.

 

[Brisel]

Double cropping vegetable land has been changing hands at over £20k/acre for a while. They don't mess around growing wheat unless it is a clean up crop. There you can get 5-10% return on capital in a good year.

 

[Robw54]

Double cropping vegetable land has been changing hands at over £20k/acre for a while. They don't mess around growing wheat unless it is a clean up crop. There you can get 5-10% return on capital in a good year.

But we are taking about main stream land shifting purely on the basis of rollover, iht or subs. Those are the fundamentals because farming in the main provides less than a deposit account at today's values. As a store of wealth , sans tax benefits gold bars would be a better bet. Brexit will add nothing to the fundamentals other than inflation and a cheap currency bringing in foreign buyers based on GBP weakness.

I really don't see the upside of land or property from where we are today.

 

[Brisel]

Gold is much like land - a tangible asset, an inflation hedge and a safe refuge in times of uncertainty. Look at how gold and farmland prices surged during the credit crunch. If the £ goes down the foreign investors will buy it up. Land became 25% cheaper soon after the Brexit vote just on currency devaluation alone. Can you explain your logic please?

 

[Robw54]

Gold is much like land - a tangible asset, an inflation hedge and a safe refuge in times of uncertainty. Look at how gold and farmland prices surged during the credit crunch. If the £ goes down the foreign investors will buy it up. Land became 25% cheaper soon after the Brexit vote just on currency devaluation alone. Can you explain your logic please?

I don't think the farmers of Europe will be rushing to buy UK land at - 13% GBP/EUR todays currency devaluation vs June 16, that will most likely reverse during the various EU nation elections forth coming 17-18.

I would add there is massive variation over the UK. Your 20k veg land example may well be a better bet than some of the urban fringe round Sheffield where we live that hasn't shifted in over a year at 6k an acre.

There is a massive amount of money looking for a home at the moment and fundamentally to keep on topic Brexit may or may not affect this depending on the economy.

Many will be looking at their balance sheets thinking land has a paper value of X - they may well find that isn't the case when they all rush for the exit at the same time. That of course is true for any asset class and many look pricey at the moment.

Your 1000 acre man paid up, bought at 1k an acre will till look ok with an additional 100 tagged on at 10k averaged down. But to start today, I don't think that a good idea if you plan to farm or even speculate.

 

[glasshouse]

Government cover ups are two a penny. If I was searching for a scapegoat to blame, a pig Farm in the area feeding swill would be my number one candidate.

But that doesnt tell us where it came from.

 

[Dave645]

I don't think the farmers of Europe will be rushing to buy UK land at - 13% GBP/EUR todays currency devaluation vs June 16, that will most likely reverse during the various EU nation elections forth coming 17-18.

I would add there is massive variation over the UK. Your 20k veg land example may well be a better bet than some of the urban fringe round Sheffield where we live that hasn't shifted in over a year at 6k an acre.

There is a massive amount of money looking for a home at the moment and fundamentally to keep on topic Brexit may or may not affect this depending on the economy.

Many will be looking at their balance sheets thinking land has a paper value of X - they may well find that isn't the case when they all rush for the exit at the same time. That of course is true for any asset class and many look pricey at the moment.

Your 1000 acre man paid up, bought at 1k an acre will till look ok with an additional 100 tagged on at 10k averaged down. But to start today, I don't think that a good idea if you plan to farm or even speculate.

Most of the land changing hands around us, is for inheritance tax at the prices for the land paid, it doesn't stack up for anything else.

And I agree unless your rolling money over or hiding it from inheritance tax it's not a time to speculate, the problem is if a patch of land comes up for sale you have had your eye on, it's unlikly to come up again if it's sold high the buyer is unlikly to resell at a loss unless forced to do so. The best you can hope you can try to rent it.
These high land prices have, encouraged a lot of land onto the market.
And farmers to pack up. Brexit is more a foot note, it's an unknown if your heavily in debt as a farm, brexit could be a worry, and may encorage you to packup, or sell some to improve your balance sheets, but all the well retired farmers in our village show no sign of selling, they are just going to pass it on, or if they are unable to farm rent it out. Then pass it on.

If your a speculator, it would be the time to sell a little and increase your solvency, so if there is a drop in land prices, your in a good position to buy.

 

[ollie989898]

Easy to say when your not a farmer..

Plenty of good reps around, plenty of very poor ones yet I don't see any famers calling for the poor ones to resign and that is the truth,,,

What I don't understand is why you don't farm in your own right given that you make out its so damn easy.................!!

Can't be that hard this farming lark- you are able to do it and you spend 99% of your time moaning like a persistent toothache.

Bad reps, I am sure they exist or existed. Plenty of folk give it up and do something else, you gotta get good or get out, simple as that.

There are some very technically proficient and open minded farmers about, I do business with a large number of them, I am confident these people will survive whether they get a subsidy cheque or not, some of them don't get any subsidy money or very little and it does not stop them one jot.

 

[james ds]

The problem here is the lack of young farmers getting into farming . The average youth of today are spoilt and can see that by going to collage they can end up with an easier life and more money . Why would they be a farmer . There not enough money in farming to compete with the high tech jobs . I can see land been abandoned here within 10- 15 yrs due to not enough men on the ground to farm it . It's happening already to some extent .

 

[ollie989898]

The problem here is the lack of young farmers getting into farming . The average youth of today are spoilt and can see that by going to collage they can end up with an easier life and more money . Why would they be a farmer . There not enough money in farming to compete with the high tech jobs . I can see land been abandoned here within 10- 15 yrs due to not enough men on the ground to farm it . It's happening already to some extent .

This is the same in all primary industries. Because labour is scarce and consequently very expensive, the only logical way to adapt to it is to use technology to ensure very high levels of output per worker.

Let me show you how the mining industry does this, and why thousands of men no longer go down holes in the ground in the UK to dig the stuff:

 

[james ds]

This is the same in all primary industries. Because labour is scarce and consequently very expensive, the only logical way to adapt to it is to use technology to ensure very high levels of output per worker.

Let me show you how the mining industry does this, and why thousands of men no longer go down holes in the ground in the UK to dig the stuff:

View attachment 476750

That's fair enough but will it get up at night and calve a cow or pull twin lambs out of a ewe outside in a field in the rain.

 

[roscoe erf]

That's fair enough but will it get up at night and calve a cow or pull twin lambs out of a ewe outside in a field in the rain.

or will every mining family have one

 

[Henarar]

or will every mining family have one

yea keep it in the back garden

 

[roscoe erf]

yea keep it in the back garden

comparing mining with farming wtf

 

[Dave645]

Plenty of folk give it up and do something else, you gotta get good or get out, simple as that.

There are some very technically proficient and open minded farmers about, I do business with a large number of them, I am confident these people will survive whether they get a subsidy cheque or not, some of them don't get any subsidy money or very little and it does not stop them one jot.

If it was as simple as getting good, there would be no problem, we unlike a mining industry are fighting the weather, we can be the best farmer and the weather can reduce yields to unprofitable levels.

It's not all about tech, tech is actually very expensive, a small farmer with just a few grands worth of old machinery which is often losing no value and can be appreciating in value, with just wearing steel the only running cost, so can return a greater margin per Ha than a farmer with all the latest tech, it's just they cannot run 500ha with that level of kit. So there ability to earn money is limited, but as efficiency goes they are more than likely off the big boys scale, by that I mean there machinery costs are a fraction. But every farm is different where that efficiency point is, is the key.

Farming is ruled by the weather what works one year doesn't the next.
This cannot be said for other industry's, we are not 2 a penny, when our skills go they are gone for good, the problem is the majority of farmers are approaching retirement, we are a high risk low reward industry, that has few young members, and new entrants.
I just don't see how if subs go the industry will afford to expand to absorb the land vacated by farmers that pack up. your not going to get Mr average farmer aged 58 to start to change in new radical ways that require even small investments.
And unless it's an inherited farm it's unlikly to get new blood, and even then getting young blood into farming is not easy, they just see what it's worth and want to cash in. That choice is made easy if we end up making nothing, for a years work, which a lot will.
I think it was a quote I read that in northern Ireland, in the last 20 years farmers had only made profits in 2-3 years above the level of subsidy they got, so taking subs would leave them only making a profit 2-3 times every 20 years, that's not going to happen. There would be no industry with out an upturn in farm gate prices. Which will only happen if we see trade restrictions. Which are unlikly, so dreams of farmers not getting subs are just that. I am not saying they will not be cut but complete removal could destroy a lot of farms. With a good chance a lot of that land will stay out of production, especially the poorest land.

 

[ollie989898]

comparing mining with farming wtf

Primary industry.

I have seen agriculture in many countries. Brazil. Eastern Europe. USA. South Africa.

There are farming operations out there that operate on a scale a barley baron in Wiltshire doesnt even dream of. There is one business in Eastern Germany that runs 25 Claas Lexion combines. In South Africa I saw a beef finishing unit that had 20,000 animals in feedlots and it was considered a modest one.

This is precisely the same as mining. Very high levels of output per worker to ensure minimal cost per unit product sold.

This is how the industry globally operates. Minimal market support and wide volatility. But they survive. No family operations because the capital cost of entry is sky high.

As I see it farming is at a crossroads.

You can cling to the hope your government will give you tax payer cash to support the industry for whatever reason is deemed valid.

You can innovate and sell added value products and accept what hurdles that entails.

You can farm smarter and better and be in the top slice of the industry who have boxed clever too. How they do this is as individual as every farm, there is no right answer.

You can upscale and reduce costs that way.

You can do nothing, moan like feck and retire at the end of the day bitter and twisted.

You can get out now and enjoy life doing whatever.

There needs to be a reality check.

I keep seeing people talk about this mythical level playing field.

It does not exist. Never has. Stop looking for one. How in the hell can there be? The American corn producer can drive 3 miles in all directions with not a hill, a pylon or a ditch to stop him. A Kiwi farmer has weather which will grow virtually anything and a government which has forged international trade deals to sell immense amounts of product their own population could not eat in a 100 years of trying.
The South African farmer can keep thousands of animals outside and never get mud stuck to his boots.

Leve playing field? You are having a laugh.

 

[gone up the hill]

Primary industry.

I have seen agriculture in many countries. Brazil. Eastern Europe. USA. South Africa.

There are farming operations out there that operate on a scale a barley baron in Wiltshire doesnt even dream of. There is one business in Eastern Germany that runs 25 Claas Lexion combines. In South Africa I saw a beef finishing unit that had 20,000 animals in feedlots and it was considered a modest one.

This is precisely the same as mining. Very high levels of output per worker to ensure minimal cost per unit product sold.

This is how the industry globally operates. Minimal market support and wide volatility. But they survive. No family operations because the capital cost of entry is sky high.

As I see it farming is at a crossroads.

You can cling to the hope your government will give you tax payer cash to support the industry for whatever reason is deemed valid.

You can innovate and sell added value products and accept what hurdles that entails.

You can farm smarter and better and be in the top slice of the industry who have boxed clever too. How they do this is as individual as every farm, there is no right answer.

You can upscale and reduce costs that way.

You can do nothing, moan like feck and retire at the end of the day bitter and twisted.

You can get out now and enjoy life doing whatever.

There needs to be a reality check.

I keep seeing people talk about this mythical level playing field.

It does not exist. Never has. Stop looking for one. How in the hell can there be? The American corn producer can drive 3 miles in all directions with not a hill, a pylon or a ditch to stop him. A Kiwi farmer has weather which will grow virtually anything and a government which has forged international trade deals to sell immense amounts of product their own population could not eat in a 100 years of trying.
The South African farmer can keep thousands of animals outside and never get mud stuck to his boots.

Leve playing field? You are having a laugh.

You haven't got one iota of a clue what your talking about.

All you seem to do is put the boot into UK farmers all the time and tell them how crap they are at the job...

If farming was as easy as you make out then you would be farming 1000s of acres in your own right but of course you wont because talk ( like you do ) is easy but actually doing is a totally different kettle of fish!

 

[texel-tom]

You haven't got one iota of a clue what your talking about.

All you seem to do is put the boot into UK farmers all the time and tell them how crap they are at the job...

If farming was as easy as you make out then you would be farming 1000s of acres in your own right but of course you wont because talk ( like you do ) is easy but actually doing is a totally different kettle of fish!

Are you as belligerent in your "real" life as you are on here? It must be quite exhausting being continually quite so negative all the time.

 

[wasted years]

You haven't got one iota of a clue what your talking about.

All you seem to do is put the boot into UK farmers all the time and tell them how crap they are at the job...

If farming was as easy as you make out then you would be farming 1000s of acres in your own right but of course you wont because talk ( like you do ) is easy but actually doing is a totally different kettle of fish!

That's not what he says at all. What rubbish you talk.

 

[czechmate]

You haven't got one iota of a clue what your talking about.

All you seem to do is put the boot into UK farmers all the time and tell them how crap they are at the job...

If farming was as easy as you make out then you would be farming 1000s of acres in your own right but of course you wont because talk ( like you do ) is easy but actually doing is a totally different kettle of fish!

It's not what many (or any) farmers want to hear but Ollie is bang on the mark with that post