Feldspar
Member
- Location
- Essex, Cambs and Suffolk
Rent, HP, insurance, etc are all fixed and sunk costs in year 1. They are to pay cropped or not. It is not true to say that a crop of beans making no profit is the same as a field of fallow making no profit. If the beans make no profit then at least I have paid my machinery and my wage.
Lets say beans at £150ac rent break even.
Beans at £80ac rent pay £70
Fallow at £150ac looses £60
Fallow at £80ac pays £10 (this year)
If my rent is £80 then I can fallow for a small profit. If my rent is £150 then I grow the beans as even if I make no cash profit then I accrue some of the cost of growing by paying off HP or attributing some of the land work to my labour.
The beans fix a tenner per acre nitrogen. The fallow certainly allows you to (for OSR) cut out the graminicide and probably half your seed rate. For wheat, depends on how good your beans weed control is.
Some people, when growing beans, might take the "fixed" nitrogen into account for working out the margin of their beans. I do this with any fallow but it's still a fairly drastic step to take.
I agree, when fixed costs already set up to farm 100% of the existing area, that not growing a crop is going to be much less profitable unless you can suddenly shrink your fixed costs (excluding rent).
What I am talking about is adding an extra amount of land where you have the free choice of whether to increase your machinery, labour etc. In that instance, even if you were paying a rent, the choice between beans or fallow should come down to which is more profitable (before the rent is deducted). That is, unless you can somehow use existing machinery to farm the land with no effect upon the existing acreage; a common lure for many farmers which often doesn't happen quite as neatly as that.