Farmers optimistic about expansion, says survey
The majority of farmers are optimistic about future growth and are planning for expansion where possible, according to the second agricultural survey conducted this year by MHA.The MHA Agriculture Insight Survey, compiled in partnership with Lancashire accountancy firm Moore and Smalley, was first conducted at LAMMA in January and rerun at Cereals 2014 in June. Collectively these surveys take into account the views of more than 200 farmers nationwide.
Key findings include: • Despite falling prices, optimism for growth is high – 69% of those who responded were expecting growth. • Expansion is an aspiration for many with 51% planning to increase their acreage. • Succession planning is a concern which is moving up the agenda for many respondents.EU predictions earlier this month, that the European cereal harvest is set to beat the average for the second year running, may be part of the reason for the optimism among those surveyed, outweighing the impact of recent drops in commodity prices.
However, many sounded a note of caution around profitability as the squeeze on margins continues to bite. There is also a shortage of available land for those looking to expand their businesses.Liz Cliffe, head of Moore and Smalley’s farming and rural business team, said: “Although the recent falls in the price of both cereals and meat was a key topic of conversation, it is encouraging that there is an underlying optimism as we go into harvest. For those looking for expansion however, the availability of the right land at the right price remains a barrier to expansion as land prices continue to rise while supply remains static.”
Aside from the concern about available land, planning for the future of the business is a worry for many. 17% of those surveyed felt that succession planning was a “great concern” and an additional 39% acknowledged that this was of “some concern”.Liz added: “Planning for the business is essential if anticipated levels of growth are to be achieved. In this business more than any other, a long term view must be taken and advice should be sought. For many of those we spoke to succession seems to be creeping up the agenda and planning for this essential. The earlier this can be done the better.” Of those surveyed by MHA, 54% would consult their accountant as a first port of call when making decisions about their business. Sound financial advice is essential – whether you are planning to expand or looking to hand over the reins to the next generation.