An agricultural accountancy firm is urging arable farmers to prepare for reduced yields and profits this harvest, as they predict a difficult season ahead.
There are several aspects which have negatively impacted the arable income this year in comparison to 2022.
This includes volatility in commodity markets due to the Ukraine war, weather instability and a significant lack of sunshine.
Mark Chatterton, head of agriculture at Duncan & Toplis, which supports 800 farming businesses, has expressed his concern for this year’s harvest.
He said the quality of wheat crops in the field was 'suffering significantly', and yields would not be as good as 2022 due to a severe lack of sunshine in July.
“Arable farmers had a glorious summer in 2022, both with higher crop yields and higher prices. This year however, the weather means that harvest is very stop and start.
"Clients are reporting that wheat yields are likely to average closer to eight tonnes per hectare, whereas in 2022, they were nearer to 10 tonnes per hectare."
Prices have also fallen, with feed wheat currently trading at £180 per tonne, down from a peak of £350 per tonne in July 2022 or £240 per tonne this time last year - a sizable decrease.
Mr Chatterton said there had been so much volatility in the commodity markets since February 2022 due to the Russian invasion of Ukraine.
"Input costs have also risen, especially fertiliser, with the price peaking at 800/tonne in summer 2022," he explained, adding that fuel and electricity prices had also increased during the 2022/23 crop year.
As well as dealing with the weather and market volatility, farmers had the added pressure of managing input purchases and crop selling.
"In addition, the higher profits from harvest 2022 will give higher tax bills," he said, "Many of these will be due for payment in January 2024, when bank balances are likely to be dwindling.
“It has never been more important to plan ahead and work with your accountant to ensure that your business is prepared for what is to come.”
