Uncertainty

We are seeing a vast amount of uncertainty at present with weather issues, pricing problems and the shadow of Brexit looming over everything. This seems to be true of every type of farming with both “Corn and Horn” suffering at the same time which is unusual.

In many cases the debts on farm are rising rapidly. Creditors are becoming an issue with merchants demanding faster payments into the bargain. For some people, the ability to avail of various Government grants and loans have had a short-term benefit, but there are consequences for the future. Loans may seem to be beneficial now but do have to be repaid over the next few years. The self-employed grant to business partners has been supportive but does become part of your taxable profit calculations at the year end. All of these aspects need to be factored into budgets and plans for the longer term.

Obviously, some of the farm diversifications have come under enormous pressures, especially if they are hospitality or tourism biased ventures. Lettings may have also suffered from people requiring rental holidays that upsets cashflow. The Banks have started to be more supportive and have enabled some loans to have a capital repayment holiday for six months, but in many cases, this is coming to an end shortly. So, what next?

This is potentially the perfect storm where certainly further north in the country, harvest is just reaching its end and yields of both grain and straw are down considerably. There is also a quality issue in many cases. How are we going to react and what escape routes are available to people? For many now is a really good time to reappraise why they are doing what they do. What are your goals? Do you want and need to achieve these goals from farming? Can the goals be attained by some other route? Is there a clearly communicated succession plan? Maybe it is time to think of entering a joint venture farming to enable a cash injection into the business and a sharing of the workload and responsibilities. This can be a very positive route forward for people who may feel backed into a bit of a corner.

Either way, if no changes are made, then nothing will alter. Be proactive and tackle your perceived predicament, by contacting Ian at ianbrowne@fcgagric.com or your local FCG office, to request a confidential conversation today.

Posted in Arable & Crops, Business Management, Dairy & Forage, Stafford.