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Farmers advised to take aggressive cost management steps as squeeze on margins continues

Despite falls in costs, experts have said these inputs have not reduced in line with commodities, leaving farmers worse off

Joel   Durkin

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Joel   Durkin
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Farmers have been advised to look at aggressive management of costs as margins continue to be squeezed.

 

Anglia Farmers’ AgInflation index showed costs were back 4.35 per cent in the 12 months to January 2016.

 

But experts pointed to the fact many farm commodity values had fallen much further.

 

LIFFE wheat prices dropped 14.9 per cent over the same period and dairy prices were back 15.8 per cent.

 

Graham Redman, partner at Andersons farm business consultant, said: “It is easy for farmers to dwell on the fact they are losing money. Can you find efficiency in the use of labour? There is an opportunity to looking really aggressively at costs.”

 

He suggested if a farmer did not think a certain input would fall much further in the coming months, now would be an opportunity to cover some requirements for the rest of winter.

 

The AgInflation figures showed falling input costs were led by fuel and fertiliser, down 20.7 per cent and 13.6 per cent, respectively.

 

Clarke Willis, group chief executive at Anglia Farmers, said: “The main driver behind this deflation is fuel and we have seen that in terms of a pence per litre drop in prices, in particular for gas oil.

 

“Some of the reduction in gas price has fed through to fertiliser prices, although it could be argued, given the significant fall in gas prices, not enough of a drop in fertiliser prices has been seen.”


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