Farm confidence falls in the UK...

The annual NFU farmer confidence survey has measured a year-on-year drop in line with market volatility and lower commodity prices, although a three-year forecast is much more positive.

The sixth annual NFU confidence survey questioned 658 farmers and growers across all regions of England and Wales and all farm enterprises in October and November 2015.  It found confidence in the arable and dairy sectors had declined significantly from 2014, with margins squeezed as farmgate prices fell faster than the reduction in production costs.  69% of the sample expected a negative impact on their businesses from regulation and legislation in the coming year; 51% from CAP reform; 56% from output prices and 46% from input prices.

Overall, twice as many farmers stated that their profitability had fallen over the past two years, with 49% respondents reporting declining profits. Some 75 thought their business might not survive – the highest figure in any of the six surveys so far. Almost 20% of dairy sector respondents were concerned their business might not survive, up from 3% in 2014.

But the survey found a more optimistic outlook over medium term prospects. More farmers wanted to invest in diversification, training and energy efficiency in the three years to come. These intentions were backed by the higher level of borrowing in agriculture registered for the first nine months of 2015.

... and in the EU

A biannual survey by the EU farm and co-operative bodies Copa and Cogeca reveals falling farm confidence as incomes decline.  

The EU statistical office Eurostat has reported a 4.3% drop in average EU farm incomes in 2015 compared to 2014. While UK farm incomes fell by 19.3%, in Germany there was a 37.6% fall, with 23.8% in Poland; 20% in Luxembourg19.7% in Denmark and 19.2% in Romania.

At the same time, the Copa-Cogeca confidence survey of 8,000 producers across ten member states showed that confidence had plummeted amongst farmers in the third quarter of 2015 from the spring survey. Dairy values had fallen by 15%, cereals and oilseeds by 16% and livestock for meat by 23%.

 “The survey shows the loss of confidence amongst farmers was mainly a result of low EU agricultural prices and the ongoing market disruption in many regions and product groups,” says Copa-Cogeca secretary-general Pekka Pesonen. “The findings clearly demonstrate clear scepticism among farmers about EU agricultural policy. Commodity prices have not rebounded and the overall farm income drop has been attenuated by reductions in agricultural labour. In 8 member states, the survey showed that many farmers faced difficulties and were concerned about implementation of the CAP, particularly in Germany and the UK whilst farmers in Hungary, Poland and Romania were more positive.”

Posted on January 4, 2016 and filed under EU Policy & Regulation, UK Policy & Regulation, News.