Surely one model doesn't fit all,we are a family farm owner occupier,no rented land,only use seasonal labour when required,all machinery paid,no finance or borrowings,by not planting our less productive areas we will be able to stretch our existing machiney a yr or 2 longer,different story if i was on a rented farm with a few men working for me.Not ideal leaving land fallow but as said due to changes in greening it has to be done anyway.It doesn't make sense to stop cropping your less than perfect land to try and magic up your yields. That can be done on a longer term basis provided that fixed costs are cut proportionately.
If you have a 400ha farm of which 200ha can produce 10 t/ha wheat crops and the rest produces 6 t/ha. Let's say that fixed costs are 500 £/ha spread over the 400ha. Even at 110 £/t you would still expect to make a small return after variable costs at 6 t/ha - let's say, looking at the TAG forecasts for GMs for this coming harvest, that you'll return 125 £/ha from a 6 t/ha feed wheet crop. The 10 t/ha part of the farm will be returning 565 £/ha after variable costs (assumed to be 535 £/ha).
If you crop the entire area you will just about make money on the 10 t/ha land, and you'll lose money on the 6 t/ha land. Overall your net return will be -£124,000.
Now what happens if you don't bother to crop the 6t/ha area "because it's not making any money"? Suddenly you double your fixed costs on the 10t/ha land and incur say a 30 £/ha cost on the fallow land for glyphosate. Now you're losing a bit of money on the fallow but a lot on the 10t/ha crops. Overall your net return is about -£184,000.
In the second scenario you might feel happier producing really good wheat crops, but you'll be worse off than if you cropped the poor land too.
This all comes back to the thread I started a while back about how variable fixed costs are. I'm assuming that you can't really vary your fixed costs. In Gary Markham's example he moved fuel into the variable costs column (and arguably you can put something from machinery repairs in as well for wearing metal), but the result still came out the same.
On top of all of this, how the hell does anyone know what the price of commodities is going to be in a year's time? Personally I think it is a much better strategy to slim the fixed costs over time and to make them more variable which will set the business up to be able to survive times as these and to be able to pick up the pieces when others fall apart.
Surely one model doesn't fit all,we are a family farm owner occupier,no rented land,only use seasonal labour when required,all machinery paid,no finance or borrowings,by not planting our less productive areas we will be able to stretch our existing machiney a yr or 2 longer,different story if i was on a rented farm with a few men working for me.Not ideal leaving land fallow but as said due to changes in greening it has to be done anyway.
If anyone has any fallow/covery crop stuff round our way.....well you know the rest !! Mum said if you don`t ask...
Cut spring barley area in half, replaced with more spring oats and renting out more land for veg.
Maltsters are brimming full with barley set against falling sales for malt.
Walking over some winter stubbles at the weekend just got me to thinking about spring planting intentions. With prices at current levels, will you still be happy to plant more barley/wht/osr or will many just leave it fallow?
Nope don't know