Brexit Preparations

What can the average person and the average small business – including farms – do to prepare for a no-deal, hard Brexit?  The answer is – not a lot.  As dairy farmers, you cannot suddenly alter your milk production quantity or quality, even if you wanted to.  You cannot suddenly change milk buyer.

Neither can you swiftly move into a new market to take advantage of all those unicorns wishing to graze on your sun-lit uplands.

However, there are a few practical steps you may consider taking.  It is probably too late to implement a massive cost saving regime, or to cut spending tightly in order to preserve cash as far as possible.  But if you are considering substantial investment(s), is this the right time to make them?

Probably of rather more practical benefit will be to ensure you have no chance of running out of supplies of essential items on your farm, particularly if they are imported.  Who knows what level the chaos at our ports may reach?

Protein may be an example of this, in that most farmers do not grow much of the protein that they need to feed their livestock.  So, I suggest you are well covered for your protein, and indeed other imported feedstuffs.  Veterinary supplies may also be an example of items to be well covered for.  Furthermore, dairy chemicals are materials that you cannot operate without, and indeed all items you need to run your dairy unit.  Fuel supplies, too, could be short.

Turning to the fertiliser market, and specifically AN, merchants are starting to see the effects of the potential no-deal Brexit.  We hear that one UK producer has already increased their November price by 6.5%, equivalent to an increase of £15 to £19 per tonne on their AN & NS range.

This is the same percentage as the WTO tariff that would apply to fertiliser in the no-deal Brexit situation.  This emphasises the advantage of buying fertiliser at the lower Aug/Oct options currently available.

I consider it is just prudent for you to ensure you do not run out of essentials this late summer/autumn.  Keep your supplies well stocked up.  I have already mentioned several items above, but each farm business should do an audit of their own stocks and supplies to ensure that your milk production capability (and indeed production of all your other outputs) is not endangered as a result of a cliff-edge Brexit.

Clearly, if all farmers stockpile and buy up all such supplies, these preparations will mean that others will suffer from a lack of essentials.  But as we face a future that is looking increasingly uncertain from 1st November (for at least a few weeks), surely it pays to make some solid preparations for your own business.

Contact Charles at charlesholt@fcgagric.com or your local FCG office, to discuss further Brexit implications on your business.

Posted in Business Management, Lincoln.