| News
Land prices to remain Dairy farmers being
buoyant in the long term short-changed to tune of
£200 million, says NFU
It is now nearly 100 days (October 1st) since the
announcement of a Brexit and Bidwells have seen land
deals agreed with prices from £7,000 to £13,000/acre for
commercial blocks of bare land ranging from 80 to 300
acres, indicating that the demand for land remains, with
the theme of wide-ranging prices looking set to continue.
rice aspirations do
need to be at the
right level and
increasingly,
private or ‘quiet
deals’ are the
order of the day. If judged well,
this can be a successful venture
for all concerned – vendors have
the certainty of a sale which meets
their criteria and buyers take
comfort from the fact they are
getting what they want without
being fully exposed to the
‘unknown investor’.
According to Ben Taylor at
Bidwells there seems to be less
correlation between the productive
capacity of a farm, in terms of the
land quality and the price it is likely
to achieve. The greater influence
now is how the land purchase may
fit into a neighbouring landowner’s
plans and their own respective
P
financial strength. This, allied to
the fear of missing out to
competition, has a far greater
influence on the end result of the
sale than the quality of the soil
(albeit the latter should obviously
not be completely disregarded).
Whilst the Chancellor’s
statement on August 13,
announcing that the current level
of funding under the CAP Pillar 1 is
to be upheld to 2020, will have
encouraged many, the reality is,
that the vast majority of investors
will be operating far beyond a fouryear time horizon.
With only circa 0.25% of the
total farmed area of the UK
available to purchase, supply will
continue to be restricted and as a
consequence, it is likely that
values will remain relatively
buoyant.
Market indicators show dairy farmers are being shortchanged to the tune of £200 million pounds, the NFU said
today. It’s calling for milk buyers to recognise the strength
of current markets and start paying fair, sustainable prices
to their milk suppliers.
fter two years of
turmoil in the dairy
sector, during
which time milk
prices for many
farmers have
been, and continue to be, below
the cost of production, commodity
markets have now quickly turned.
Evidence shows market signals
are pointing skywards with spot
prices for milk now approaching
40ppl and quotes for next month
hitting 50ppl.
But speaking on the eve of The
Dairy Show on Wednesday
(October 5), NFU dairy board
chairman Michael Oakes said that
milk buyers are lagging behind in
passing on the huge lifts in market
prices to their suppliers.
“Since May this year market
indicators have started to show a
massive differential between what
prices dairy farmers should have
got compared to what they
actually did get – between June
and September this adds up to
around £200 million”, said Mr
Oakes.
Dairy analyst Chris Walkland
has being doing the sums – they
show that back in August AHDB’s
AMPE and MCVE indicators were
26ppl and 28ppl respectively while
future price indicators continue to
be positive. Even today most nonaligned prices are still at or below
20ppl with the August Defra
average milk price, which included
A
www.farmingmonthly.co.uk
aligned prices only reaching
21.34ppl.
“Clearly milk buyers should be
concerned as to where their future
milk supply will come from”, said
Mr Oakes. “That’s why recently
we’ve seen Dale Farm Northern
Ireland encourage more milk
supply for the next three months.
Any extra litres supplied to the cooperative will receive an extra 4ppl
on top of a 2ppl winter premium.
“Since May this year market
indicators have started to show
a massive differential between
what prices dairy farmers
should have got compared to
what they actually did get”
“Farmers have been patient,
understanding the time lag that is
part of dairy trade. But that reason
is starting to wear thin, as we need
to start considering increased
costs of winter housing and
feeding. Our message is clear –
until milk buyers start backing
British dairy farmers and start
paying fair, sustainable milk prices,
volumes will not recover.
“Dairy farmers want to produce
milk and the only way milk buyers
can pull the dairy sector out of this
nose dive is to quickly pay them a
profitable price for their milk.”
October 2016 | Farming Monthly | 07