Arable producers are facing further cashflow pressures, as the depression on prices continues to strain farm returns.
Amid continuing high supplies, both in the UK and globally, those speaking to Farmers Guardian suggested proactive marketing was key to stemming losses during a hard time for the industry.
After a difficult 2015, grain prices have faced continual pressure since the turn of the year. May 16 LIFFE wheat futures have lost about £15/tonne since the start of January and have remained slightly above £100/t in recent days.
Robert Law, who farms about 1,600 hectares (3,950 acres) of arable crops on the Hertfordshire, Cambridgeshire and Essex border, said he had still not received his Basic Payment, suggesting this was adding further pressure to cashflow.
He said: “I have still not been paid anything yet. I was told the delay to my payment was because of common grazing rights.
“Last year, the yields helped us out. Wheat yields and barley yields were very good, but we are still producing below the cost of production and are still reliant on the farm payment when it turns up.”
He added when marketing his crop he often sold through futures to mitigate risk in crop prices.
Leadenham arable farmer Andrew Ward said the current situation was not easy for arable farmers.
He said: “On black-grass land, the cost of production is approaching £140/t. Chemical companies are saying farmers must still maintain inputs. In my view, they do not understand costs of production.”
Mr Ward claimed he had sold a proportion of next year’s crop forward. He added farmer application of fertiliser and other crop protection may decline in the coming year due to affordability issues.
New Defra figures published in recent weeks increased production estimates for wheat, barley and oat production, compared with figures released in November.
AHDB Cereals and Oilseeds said a ‘strong export pace’ in the second half of the season would be needed to address the current surplus in wheat and barley.