Farming’s profits damaged by fall in prices

SLUMPS IN farmgate prices for key commodities such as milk and pork are largely to blame for the falling overall profitability of farming, the National Farmers’ Union said.

Richard Lister with some of the pigs at Ellenthorpe Lodge Farm near Boroughbridge.

Total Income from Farming (TIFF) figures released by the Department for Environment, Food and Rural Affairs show that in real terms the headline figure for 2014 fell by 4.4 per cent to £5.4billion.

Even so, the agricultural industry continued to show great resilience, the NFU said, pointing out that farming’s contribution to the UK economy, by Gross Value Added (GVA), had risen to almost £10bn.

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NFU President Meurig Raymond said: “These figures underline the impact of falling commodity prices. We have seen a roller-coaster ride in terms price falls across the various farming sectors over the past year and this trend has continued into 2015.

“For example dairy and pig prices are currently almost 20 per cent below compared with the same period last year and lamb values are also under pressure.

“The stronger pound has also exerted downward pressure on the sector’s profitability in 2014 and continues to be a critical factor in determining commodity prices.”

North Yorkshire farmer and National Pig Association chairman, Richard Lister, said it remained a tough time for pig farmers.

The current pig price is 125/130 pence per kg, compared to around 175 per kg last year.

Mr Lister, who farms at Boroughbridge, said: “It wasn’t until the EU was banned from trading into Russia that I think we realised just how much pork was being exported there. Twenty-five per cent of EU pork was going into Russia and so the ban has had a significant affect on prices.

“In addition, the weakness of the Euro against the pound has enabled other European producers to find other markets but it has made our pork expensive. This has also meant that cheaper pork has been imported this way (into Britain).

“One plus is that the retailers have supported British pork and have realised the benefits of audited supply chains since horsegate.

“We have also had a little bit of relief with grain prices that has helped us stomach the price fall but there will be some producers who are taking a lot of pain at the moment.”

The downturn in the dairy sector is long and well-documented, with 55 dairy farmers having quit in North Yorkshire last year alone.

Milk prices have tumbled since February 2014, from an average of 33.95 pence per litre (ppl) then, to 27.22ppl this February.

The NFU stressed that whoever ends up at Number 10 after the General Election, the next government must ensure that it has the right policies in place to help British agriculture invest and grow for the long term.

Mr Raymond said: “UK farming’s contribution to the wider economy has increased by 34 per cent. With the right conditions British farmers can continue this impressive long-term performance.

“We want the next government to create the right environment to encourage investment, growth and innovation, therefore securing the future of the country’s food and farming industry. The NFU’s farming manifesto highlights the key policy recommendations that the industry, along with Government can address to deliver this continued growth.”