Input inflation followed by a PRICE CRASH?????? deja vu

[Bossfarmer]

Wheat at £200 and urea at £300 is far better than wheat at £150 and urea at £200 . I hear what you’re saying and agreed fert will track wheat faster in a upward trend than a downwards trend but we had a chance to buy at a decent price .

i just get the feeling farmers are going to be lured into a false sense of security with the higher than usual cereal prices then all of a sudden the price could half, farmers might realise they have less sub that they used to and 100k tractors/combines on hp, i see a lot of farmers going overboard with kit just now

 

[Brisel]

That wouldn’t be wise. Being locked into high depreciation/finance payments for years just to mitigate current tax bills will hurt later. I’d be looking at refurbishing equipment which is entirely tax deductible to see them through a lean period that is surely coming.

My current aim is to expand and use field scale stewardship options e.g. AB15 2yr legume fallow, as a substitute for unprofitable break crops and second/third cereals. Farm more acres with the same kit, serve rent review notices and renegotiate contract farming first charges down to reflect the declining BPS. ELMS will NOT replace BPS. It’s time to plan accordingly. BPS costs 5p in the £ to cross comply. Elms will be 60p+.

 

[Farma Parma]

N fert has risen from, say, 55p/kgN (urea at £250, where it was for a long period) to 70.6p/kgN (urea at £325, current).
Difference is 15.6p/kgN, or £32.76/Ha at 210kg, or £3.28/t for a 10t crop. Or £3280 'profit forgone' for a 1000t of wheat output.
And thats assuming you didn't buy any fert at the lower price.

@Bossfarmer if this is the difference between survival and penury, then it's not the world nitrogen price thats to blame.

Good adding up there, you are right its not the end of the world if its £75/t dearer esp coming from a relatively cheap price last summer on the scale of things
still wished id bought poss 2 years worth but when are we ever right in doing so. Its no diff to fuel prices you win you loose.

 

[Farma Parma]

i just get the feeling farmers are going to be lured into a false sense of security with the higher than usual cereal prices then all of a sudden the price could half, farmers might realise they have less sub that they used to and 100k tractors/combines on hp, i see a lot of farmers going overboard with kit just now

It seems as if Machinery Men are doing ok atm but there day is coming & i think some are finally understanding this

 

[average farmer]

i just get the feeling farmers are going to be lured into a false sense of security with the higher than usual cereal prices then all of a sudden the price could half, farmers might realise they have less sub that they used to and 100k tractors/combines on hp, i see a lot of farmers going overboard with kit just now

It would be foolish to believe these prices are here to stay. Don’t worry about what others are doing if it’s not affecting you!

 

[Hilly]

i just get the feeling farmers are going to be lured into a false sense of security with the higher than usual cereal prices then all of a sudden the price could half, farmers might realise they have less sub that they used to and 100k tractors/combines on hp, i see a lot of farmers going overboard with kit just now

Row your own boat , who cares what other people do?

 

[turbo]

i just get the feeling farmers are going to be lured into a false sense of security with the higher than usual cereal prices then all of a sudden the price could half, farmers might realise they have less sub that they used to and 100k tractors/combines on hp, i see a lot of farmers going overboard with kit just now

The cereal price rises have more than covered the lost sub,you need to sit down and work out how to make money at lower prices when the sub goes rather than worrying about how much others are spending on kit

 

[T Hectares]

I’d say there’s been a bit of a spending spree locally, the thinking has been last year of full Bps and decent commodity prices has allowed some to buy new kit which will see them through the lean years on the way...
Dealers will have a lean time the next few years for sure, there’s been a lot of DD drills sold too

 

[Brisel]

Best cure for high prices......?

Machinery & fertiliser prices have historically gone up like a rocket, but come back down slowly, like its stick. That's no guarantee of being repeated but IMO it will.

 

[glasshouse]

Where? In your part of Scotland? That certainly wasn’t the case in the South. Plenty of rent review notices served though.

Land with no entitlement post 2004 with wheat at £60 was unrentable.
There were instances of owner paying tenant £20/ac to farm it.
Plenty of deals done at zero rent

 

[Bossfarmer]

The cereal price rises have more than covered the lost sub,you need to sit down and work out how to make money at lower prices when the sub goes rather than worrying about how much others are spending on kit

i do plenty of working out, im just commenting on what im seeing from others

 

[turbo]

i do plenty of working out, im just commenting on what im seeing from others

So what if others are spending they have a different outlook for the future of agriculture than you do,one of you will be correct !,if it’s you your be able to do your favorite thing and buy more land but if they are correct you could be the one selling

 

[Daniel]

That wouldn’t be wise. Being locked into high depreciation/finance payments for years just to mitigate current tax bills will hurt later. I’d be looking at refurbishing equipment which is entirely tax deductible to see them through a lean period that is surely coming.

Eh? Buying equipment is tax deductible?

 

[Brisel]

Eh? Buying equipment is tax deductible?

Within capital allowances, yes. They weren't always £1m though. My point is about not just buying kit to offset tax when there can be cheaper alternatives like reconditioning.

 

[Farma Parma]

5 year ave is very handy in the Tax calc job esp if you made little in 3 out of the 5 year period & suddenly in year 4 of 5 ya profit jump is quite vast
As is often the case in this Farming Lark

 

[Farma Parma]

Eh? Buying equipment is tax deductible?

Sssssshhh dont tell everyone..
You wonder why lots of other business's outside of farming seem to get a panic on if a certain budget allocated to whatever it is Isn't drawn upon before the end of the tax year.
If it isn't they seem to say its just not available say a month later. Strange ways or working some Council/Gov depts have shall we say...

 

[Brisel]

There’s a difference between a business budget and a tax budget

 

[ridger]

i do plenty of working out, im just commenting on what im seeing from others

You never show figures though. Its always i believe or I've heard or some such nonsense

 

[Tealo]

Oversupply in Europe because the Germans can't export to China since their country now has some African Swine Fever in it.

Off topic I know but why don't we fill the gap in China.

 

[turbo]

You never show figures though. Its always i believe or I've heard or some such nonsense

To many carpet burns from playing with his toys on his Mums carpet to be able to write down figures for on here