Outlook is brighter says Redman

A leading farm economist has suggested the outlook for UK farm profitability in 2018 is brighter than it has been for some years. Writing the latest edition of the John Nix Pocketbook for Farm Management, Graham Redman put projected returns for most farming sectors at their highest levels for four years.

He suggests the gross margin for feed wheat next year for an average producer could reach £744 per hectare or £300 per acre, up about 12 per cent, based on a price on a futures price of £140 per tonne which is roughly where November 2018 ex-farm prices currently sit.

He is similarly upbeat about winter oilseed rape with projected outputs of £662 per hectare, the highest margin for the crop since 2014.

In the livestock sector, he believes the outlook is equally positive, with dairy budgets up above the 2016 and 2017 years with allyear-round calving herds averaging a gross margin of over £1,000 per cow, a level not seen since 2015.

For beef, autumn lowland suckler herds are predicted to generate £200 per cow head, again a figure not achieved for many years, while sheep gross margins return a strong set of results from lowland and upland lambing as well as rearing and finishing.

The figures in the book are for the “average farmer” but he warns that the biggest difference between top and bottom farmers is often the overheads and these are more difficult to measure.

“It is easy for rising overheads to erode any additional gain from gross margins and the need to keep tight control of them is as important as ever,” he said.