I heard a correspondent on Radio 4 this week say that there are now 14 different factions in Parliament in terms of their attitude and aims for the Brexit negotiations. Given that range of views, and the strength of feeling behind them, it is hard to see any type of Brexit that is going to go through Parliament easily. And of course, Brussels and the other 27 member states have rather a lot of say in the matter, particularly the Irish. All this is making it more and more likely that we will crash out of the EU with no deal, that there will be a resumption of border checks of varying sorts, that the pound will weaken further, and that labour on farms will become even less available.
The weakening of sterling will be likely to help milk prices on farm, as we are a net dairy importer. But farm input costs will rise, and labour costs will rise as availability decreases. It will also make it even less likely that we would follow EU agricultural policy very closely, and so I see farm support reducing further as a result. Environmental payments are likely to increase, but these are frequently difficult to access for dairy farms, particularly reasonably intensive ones.
What can you do now to Brexit-proof your business? The most important matter now is to ensure you are producing milk as efficiently and cheaply as possible, given current constraints. So, challenge your consultant, challenge your colleagues in your discussion group, and seek out the best producers to emulate. Oh, and pay down debt.
To discuss further, contact Charles at firstname.lastname@example.org or your local FCG office.