Farm consultants Andersons are warning some cereal farms could need negative margins before support payments in 2020, according to their modelling. Using their model arable farm of 600ha of mixed crops, they show the effect of failing to plant half the winter wheat planned will pull a £38/ha profit last year down to a loss of £78/ha. This model has been used since 1991 and showed positive pre-support margins for the last three years.
Consultants told farmers at Lamma 2020 that they must calculate the different costs between leaving unplanted fields fallow or establishing a spring variety. In their model, they show the change in income when half the winter crop is switched to spring varieties.
As a result, overall output drops as the revenue from the spring crop will not be as large as from winter wheat despite some malting premium being assumed. Further output has also been reduced by the forecast oilseed rape yield being decreased as many UK OSR crops are looking sickly in the wet ground. Variable costs look to decrease compared to 2019 as many farms are growing cheaper spring crops. However, overheads continue to drift upwards, following the pattern of recent years. Overall, their model farm is budgeted to make a loss from production.
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Farm consultants Andersons are warning some cereal farms could need negative margins before support payments in 2020, according to their modelling. Using their model arable farm of 600ha of mixed crops, they show the effect of failing to plant half the winter wheat planned will pull a £38/ha profit last year down to a loss of £78/ha. This model has been used since 1991 and showed positive pre-support margins for the last three years.
Consultants told farmers at Lamma 2020 that they must calculate the different costs between leaving unplanted fields fallow or establishing a spring variety. In their model, they show the change in income when half the winter crop is switched to spring varieties.
As a result, overall output drops as the revenue from the spring crop will not be as large as from winter wheat despite some malting premium being assumed. Further output has also been reduced by the forecast oilseed rape yield being decreased as many UK OSR crops are looking sickly in the wet ground. Variable costs look to decrease compared to 2019 as many farms are growing cheaper spring crops. However, overheads continue to drift upwards, following the pattern of recent years. Overall, their model farm is budgeted to make a loss from production.
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