'There's no money in it'

[ILovebaling]

Seems to be a common term on nearly every subject, be it sheep, sucklers, dairy, most types of contracting, arable etc etc etc, by quite a lot of people. So how/why are you still in the agricultural industry if no one is making money?
And this was before the whole covid 19 job so I'm not even including that as and added issue people have.

 

[Doing it for the kids]

Diversification!

 

[Flat 10]

Seems to be a common term on nearly every subject, be it sheep, sucklers, dairy, most types of contracting, arable etc etc etc, by quite a lot of people. So how/why are you still in the agricultural industry if no one is making money?

Stubborn mindedness. No diversification here and rent to pay.

 

[snarling bee]

Diversification
Farming would put food on the table, just, diversification allows me to live in the way I seem to have become accustomed.
But without the farm there would be no diversification.

 

[startinghandle]

It's a way of life

 

[Old Spot]

Yep that’s going really well at the moment!

 

[Derrick Hughes]

I would suggest by no money they could be managing to survive but not building any resurve

 

[Goweresque]

Boiling frog syndrome. If things get bad very quickly, something has to change and people are forced into bankruptcy, sell up etc etc. If things just get bad slowly, drip by drip, with occasional good years thrown in by some good luck on yields and prices, then there is a natural tendency to just keep going, rather than face the upheaval of facing the issue, making a decision and stopping farming and doing something else. Plus of course the drip drip of subsidy allows that process to be even longer drawn out.

One thing life has taught me is that people are very resistant to change, and more often than not it has to be forced upon them rather than them look at a situation objectively and make a voluntary change.

 

[TSB1]

It’s my hobby

 

[happycows]

Yep that’s going really well at the moment!

It could be worse. Much worse!

 

[Werzle]

Seems to be a common term on nearly every subject, be it sheep, sucklers, dairy, most types of contracting, arable etc etc etc, by quite a lot of people. So how/why are you still in the agricultural industry if no one is making money?
And this was before the whole covid 19 job so I'm not even including that as and added issue people have.

Farming and farm ownership isnt something you can jump in and out of very easily, if the job ever improves we would never afford to get back into farming if we sold up during the bad times. Very hard giving up generations of hard work and what we were bred and destined to do too

 

[deleted user 837354]

Seems to be a common term on nearly every subject, be it sheep, sucklers, dairy, most types of contracting, arable etc etc etc, by quite a lot of people. So how/why are you still in the agricultural industry if no one is making money?
And this was before the whole covid 19 job so I'm not even including that as and added issue people have.

Given that at least a portion of the industry are clearly unable to recognise, much less calculate, their true costs of production, I still refuse to believe anyone who only ever says there is no money in X. Because I have met people doing a variety of things and there clearly is money in certain things. Are they superhuman, have extreme business acumen or luck I have no idea but there are people out there still farming and making money, even making purchases or changes to their business today.

 

[bluebell]

if you are fortunate to own the land, farm its, worth goes up regardless of the farming thats carried out ? many survive on the subsidy but thats changing? plus land if its in the right location becomes worth millions for building all these thousands and thousands of houses ?

 

[DrWazzock]

Boiling frog syndrome. If things get bad very quickly, something has to change and people are forced into bankruptcy, sell up etc etc. If things just get bad slowly, drip by drip, with occasional good years thrown in by some good luck on yields and prices, then there is a natural tendency to just keep going, rather than face the upheaval of facing the issue, making a decision and stopping farming and doing something else. Plus of course the drip drip of subsidy allows that process to be even longer drawn out.

One thing life has taught me is that people are very resistant to change, and more often than not it has to be forced upon them rather than them look at a situation objectively and make a voluntary change.

Very accurate.
Being honest we run our cash reserves down slightly each year, some years faster than others, not because we don't make a profit, but because the profit doesn't quite cover drawings.
This coming year could well see our first operating loss made for as far back as I have records, maybe 30 years, due to extreme weather events which continue to confound all our considerable efforts to turn the situation around. We don't pay rent or borrow but there are too many of us on 200 acres. Honest fact.
This is concentrating our minds. Things will have to change fairly urgently or in not many years we will have run out of cash and I can't imagine anyone being a hurry to lend us any.
Its not that there is no money in it, its that there isn't enough money in it and the risks are becoming greater. Most of our neighbours have packed up already or let it and got jobs elsewhere.

if you are fortunate to own the land, farm its, worth goes up regardless of the farming thats carried out ? many survive on the subsidy but thats changing? plus land if its in the right location becomes worth millions for building all these thousands and thousands of houses ?

But you have to sell it to realise the cash then what? With the rate of returns available today you would still be living on capital and whacked with a huge IH tax bill. It also costs a fortune (i'd say probably more than most small farmers cash flow could withstand) nowadays to bring development land to market with no guarantee of getting permission.

In my view we need bolt on businesses that we can run alongside the farm, but that means simplifying the farm. Do I give up sugar beet and go all cereals to free up time? Do I let it. That's the sort of questions we are asking ourselves. Its painful though. Because we have built up modest infrastructre and knowledge which is then non productive and surplus to requirements and on the machinery side probably worth scrap price only when it was at least generating a return but not a big enough return due to low commodity prices such as beet being half the price it was 30 years ago while input costs have easily doubled.

I won't be giving up farming entirely but I know I can no longer rely on it.
But with economy trashed by virus and farm on the rocks due to weather its the perfect storm at the moment, (and quite literally outside with this wind.)

 

[Pieces_of_Eight]

As an observer (and a consumer) looking at production from an external position, I sometimes see that 'profits' are calculated (in the loosest definition) after 'lifestyle' expenses that are unrelated to production have been deducted.

 

[deleted user 837354]

No money in it- been continuing to life the same lifestyle for decades with no change in circumstance.

 

[bluebell]

must be many farmers landowners getting millions of pounds judging by the thousands of houses either that have been built or to be built, around me, many just roll it over and buy another farm? so the cycle goes on ? the more land you own, control the more chances of getting building permission, plus every old farmyard around here is becoming it own mini housing estate or industrial estate, if you take the long view and can attract the right tenants and put up with all their antics?

 

[DrWazzock]

As an observer (and a consumer) looking at production from an external position, I sometimes see that 'profits' are calculated (in the loosest definition) after 'lifestyle' expenses that are unrelated to production have been deducted.

If 75% of the running costs of 16 year old Skoda include "lifestyle" expenses then yes you are right.

No money in it- been continuing to life the same lifestyle for decades with no change in circumstance.

Circumstances have most definitely changed on the smaller farms, maybe not so much on the bigger ones.

 

[7610 super q]

SFP.
Way of life.
Hobby.
Nice house in the country.
Hoping the supply / demand situation falls in our favour....

I am baffled by the amount of new tractors/ machinery I see about the countryside though.

Just me getting 1970's prices then ? ?‍

 

[DrWazzock]

SFP.
Way of life.
Hobby.
Nice house in the country.
Hoping the supply / demand situation falls in our favour....

I am baffled by the amount of new tractors/ machinery I see about the countryside though.

Just me getting 1970's prices then ? ?‍

Great big Fendts bouncing past everyday but tend to be bought out of vacuum cleaner money.
To me £10k is a lot to pay for a tractor.
I'd be pleased with 1970's prices for the beet!