Levels of Subsidy in Farm Income - Graph from Farm Business Survey
- Thread starter N.Yorks.
- Start date
choochter
Member
- Location
- aberdeenshire
I don't understand the graph
- Location
- South Wales UK
Looks like nothing from farming all from aid ?
choochter
Member
- Location
- aberdeenshire
So 'Cereals' and 'Mixed' are heavily reliant on subsidy, 'Horticulture' and 'General Cropping' less so.
Must be huge regional variation, though...
Must be huge regional variation, though...
If you can predict what will happen next year it would be nice, to predict farming over 5 years is total guess work, the factors at play are so vast, weather, banks, govermant policy's, yields, Argo chemicals getting banned and or rise in price, fuel prices, public support or lack of, harvests in other countries being good or bad.
In very general terms, it's predicted that the uk will become a net importer of wheat sometime in those 5 years. Which could be good but most likely will make little difference.
If wheat rises in price, it will suppress pigs and other livestock profit margins unless they also see increased prices.
The next thing that happens when the agricultural industry's suppliers note we are making more money they put their prices up which absorbs a good percentage of our profits.
To quote an aged rock star Graham Parker from the film, This is 40, "the secret to life is small nuts", by that he means keep your overheads small.
It just lets you weather any storms coming our way.
In very general terms, it's predicted that the uk will become a net importer of wheat sometime in those 5 years. Which could be good but most likely will make little difference.
If wheat rises in price, it will suppress pigs and other livestock profit margins unless they also see increased prices.
The next thing that happens when the agricultural industry's suppliers note we are making more money they put their prices up which absorbs a good percentage of our profits.
To quote an aged rock star Graham Parker from the film, This is 40, "the secret to life is small nuts", by that he means keep your overheads small.
It just lets you weather any storms coming our way.
If you took the Agriculture and Diversified income together, that is what you would have left over as income in a no subsidy system. If you were a family farm this would represent your payment for unpaid family labour.
The graph shows the only 'cropping' system actually making money from their agricultural production is horticulture.
What I was getting at with the question was, how will that 'subsidised income' be replaced in the future, if we ended up down the New Zealand route?
Yes, I understand what your saying, but for every one in your situation who makes money from their agricultural production (I assume) then there is someone else doing poorly. The average represents the whole sector in one figure. You do well in comparison to the average means someone at the same time does less well than the average.
Yes, these are obviously averages. If someone does well in an area with good soil, climate and management then there is going to be other who aren't in the same situation.
So, in 10 years from now are those without sub in areas that aren't profitable going to be owners of scrub land?
I am fairly sceptical of the figures. For one thing i dont think the sample size is really big enough. The averages must also include a lot of very small farms which are not fully reliant on the farm for a living. That said they are the best we have and everyone (including me) has a desire to compare and measure which is probably a good exercise.
- Location
- Near Colchester
I am also a little sceptical - the farm business survey always used to put our income well below what the accountant, tax-man and me put it - they tend to do things like input an average rent -whether or not you pay one, and price up family labour too and knock that off the income.
I wouldn't go worrying too much if you know that your figures are better.
I wouldn't go worrying too much if you know that your figures are better.
- Location
- Fife
Yes. Or they will sell/rent the land to someone else who will make it profitable.
So would you be happy in a no sub world? Would you focus less on cereals (big assumption, as you're Colchester!) and have a wider range of enterprises?
- Location
- Lincolnshire
Those graphs seem overly negative in the Ag production side of things.
190 acres here, grade 3 land, 50% sheep and cattle, 50% arable.
It's rude to talk about money, but here goes. For year to March16 we made a profit of £28,000 including BPS, before our drawings. When our drawings (2 working partners) and a bit of shed building are taken into account we finished the year with the same amount of money in the bank as we started it.
So the BP, which was about £14,000 wasn't all of our profit.
Sobering to consider that in 2012 we made profit of £58,000 and it's been declining slowly ever since.
Reason: increasing variable costs, particularly agchems and declining commodity price.
We aren't exactly efficient and tend to bumble along. If we paid a rent or borrowed money, I think we'd be in trouble. But on the other hand we don't have economy of scale and tend to work in a muddle at half throttle.
We could do better, maybe, and I think with a bit of diversification and work off farm, we could manage without BP. I wouldn't consider it sensible to either rent more land or borrow to buy more land. That wouldn't help us. We need enterprises and other sources of income to spread the risk.
190 acres here, grade 3 land, 50% sheep and cattle, 50% arable.
It's rude to talk about money, but here goes. For year to March16 we made a profit of £28,000 including BPS, before our drawings. When our drawings (2 working partners) and a bit of shed building are taken into account we finished the year with the same amount of money in the bank as we started it.
So the BP, which was about £14,000 wasn't all of our profit.
Sobering to consider that in 2012 we made profit of £58,000 and it's been declining slowly ever since.
Reason: increasing variable costs, particularly agchems and declining commodity price.
We aren't exactly efficient and tend to bumble along. If we paid a rent or borrowed money, I think we'd be in trouble. But on the other hand we don't have economy of scale and tend to work in a muddle at half throttle.
We could do better, maybe, and I think with a bit of diversification and work off farm, we could manage without BP. I wouldn't consider it sensible to either rent more land or borrow to buy more land. That wouldn't help us. We need enterprises and other sources of income to spread the risk.
Honest post, cheers.
- Location
- Near Colchester
I am mainly pigs although I do have sheep, cattle, arable, chickens and a shop. I am not focused on anything with a subsidy.
Subsidy not a huge percentage of turnover therefore at around 2 % but sadly bigger than my profit in both the last 2 years possibly due to lack of focus.
- Location
- Lincolnshire
Really it comes down to do we work every hour and plan every detail, or do we say sod it, I'm having the weekend off, other than doing the basics for the stock.
Dad once started doing a bit of work off farm with his digger and soon the phone was ringing everyday and he was off at the crack of dawn every morning. But it got tiresome so he packed it in. We have had similar schemes with contracting work etc but there's more to life. As long as I can pay my way I'm happy. Lions only hunt when they are hungry. The rest of the time they lay in the shade.
Dad once started doing a bit of work off farm with his digger and soon the phone was ringing everyday and he was off at the crack of dawn every morning. But it got tiresome so he packed it in. We have had similar schemes with contracting work etc but there's more to life. As long as I can pay my way I'm happy. Lions only hunt when they are hungry. The rest of the time they lay in the shade.
- Location
- East Yorkshire
Are these figures after drawings/wages, or before? Unless that is made clear, the figures are meaningless.
For the family farm these are 'before' family unpaid labour.
- Location
- Lincolnshire
16/17 won't be as good as 15/16 due to being a ton per acre down on barley yields. The wheat yielded reasonably well for this land, but we sold a bit early so nothing fantastic there. Sheep lambing percentage wasn't too good either and the addition of suckler beef herd has just about covered costs but no more, due to a losing a heifer. Hay and potato sales have been good, and other income due to non farm work is increasing. This points the way IMO. Try to keep the farm on a mean and lean basis, and seek real income elsewhere. The future of the arable here looks uncertain due to the machinery reaching the point where spares are becoming costly. We do the maintenance work ourselves but the spares, for example new front elevator chain for combine at £1500 is becoming a bit ridiculous given it will take 15 aces profit out of 100 acres arable just to pay for that, and there is something like that every year plus a few unexpected items. With blackgrass, we either have to spend more on chemicals or move to more Spring cropping. Spring cropping here has never really delivered due to either late drilling waiting for heavy land to dry, or drought on the sand. We are trying beet again but once the machinery is worn out, getting contractors in will make it not very interesting profit wise.
The biggest problem I see for small farms is the cost of machinery more than anything. Simple, smaller reliable secondhand kit is becoming hard to find at a reasonable price.
The biggest problem I see for small farms is the cost of machinery more than anything. Simple, smaller reliable secondhand kit is becoming hard to find at a reasonable price.