Now that harvest is well under way it is frustrating that the weather has turned changeable although at the time of writing it does look as though the weather may be a little more settled in to the early part of the week. However, of more concern to may arable farmers is the continuing decline in the value of arable crops.
Wheat is currently trading around £143/t which is almost £10/t down in last week and £43/t down on the price this time last year. It is of course hoped that this year’s crop will yield better than last year’s rain affected crop but even so with prices down approaching 25% compared to last year this does present a challenge to many farmers.
Similarly, Oilseed Rape, which is one of the most popular break crops in an arable rotation in this area, has seen prices fall by £95/t from £373/t this time last year to £278/t this year.
The reason for the fall in wheat price is largely because there are good harvest prospects across the northern hemisphere which is in contrast to recent years where the USA and other areas have been hit by drought or very wet weather as we experienced here last year.
As far as the Oilseed Rape is concerned there are similar factors in play. Global production is predicted to be up thereby depressing prices but this market is also influenced by oil prices more generally because some of the Oilseed Rape is used in the biodiesel market. However, European policy on biodiesel is under review which is likely to result in further price uncertainty although paradoxically prices did rise last week on news that the USA had reduced its estimate of Soya production which had a positive “knock on” effect on the Oilseed Rape market.
All this goes to show how the profitability of farming in this country is now intimately related to world market prices. Therefore all farmers can do is influence the things over which they do have control and not worry too much about those things over which they have no control at all. In simple terms this means they have to farm as efficiently as they can and then hope that world commodity markets hold up sufficiently to yield a sensible return on their investment of time and capital.
On the positive side, every cloud also has a silver lining and these lower prices should feed in to lower feed prices for livestock farmers which will be good news to many in mid-Somerset where in general livestock farming of one form or another tends to dominate.
James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk
Wheat is currently trading around £143/t which is almost £10/t down in last week and £43/t down on the price this time last year. It is of course hoped that this year’s crop will yield better than last year’s rain affected crop but even so with prices down approaching 25% compared to last year this does present a challenge to many farmers.
Similarly, Oilseed Rape, which is one of the most popular break crops in an arable rotation in this area, has seen prices fall by £95/t from £373/t this time last year to £278/t this year.
The reason for the fall in wheat price is largely because there are good harvest prospects across the northern hemisphere which is in contrast to recent years where the USA and other areas have been hit by drought or very wet weather as we experienced here last year.
As far as the Oilseed Rape is concerned there are similar factors in play. Global production is predicted to be up thereby depressing prices but this market is also influenced by oil prices more generally because some of the Oilseed Rape is used in the biodiesel market. However, European policy on biodiesel is under review which is likely to result in further price uncertainty although paradoxically prices did rise last week on news that the USA had reduced its estimate of Soya production which had a positive “knock on” effect on the Oilseed Rape market.
All this goes to show how the profitability of farming in this country is now intimately related to world market prices. Therefore all farmers can do is influence the things over which they do have control and not worry too much about those things over which they have no control at all. In simple terms this means they have to farm as efficiently as they can and then hope that world commodity markets hold up sufficiently to yield a sensible return on their investment of time and capital.
On the positive side, every cloud also has a silver lining and these lower prices should feed in to lower feed prices for livestock farmers which will be good news to many in mid-Somerset where in general livestock farming of one form or another tends to dominate.
James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk
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