Arable farms in the UK are expected to see improved financial margins this year, according to forecasts by consultancy firm the Andersons Centre.

“The short-term prospects for combinable crop businesses are pretty good, unless there is a weather disaster between now and harvest, or prices collapse completely,” said Richard King.

Improved grain prices and forecasts of better yields are the two key factors behind the upbeat predictions for the 2021 season.

“Crops in the ground look good, so we expect yields to be okay and the planted area is back to where it typically was before 2020. Farmers this year should have more to sell from their harvest,” King said.

Every year, the Andersons Centre present data for a typical English arable farm which is based on information from their clients’ farms.

In 2020, net margin before Basic Payment at “Loam Farm” was £46/ha, but this is forecast to increase to £233/ha this year.

“There are plenty of businesses where the 2020 harvest was not as rosy as the Loam Farm model, so surpluses from the 2021 harvest will be covering cash deficits from last year,” added Jamie Mayhew from Andersons.

Payment cuts

The improved margins in arable enterprises will help offset lost income from reduced Basic Payments in England this year. Payments will fall by at least 5% during 2021 in the first step of a seven-year transition period where direct support is to be gradually phased out.