Accountancy agency Duncan & Toplis is warning arable farmers to be ready for diminished yields and income this harvest.
The corporate, which helps agri-businesses throughout the East Midlands, has expressed concern over this years harvest and predicts a troublesome season forward for farmers.
A number of components have contributed to the adverse impression on revenue this 12 months compared to 2022, together with volatility in commodity markets as a result of Ukraine warfare, climate instability and a “vital lack of sunshine”, the corporate mentioned.
Head of agriculture at Duncan & Toplis, Mark Chatterton, mentioned: “What a distinction a 12 months makes. Arable farmers had a wonderful summer time in 2022, each with greater crop yields and better costs. This 12 months nonetheless, the climate implies that harvest may be very cease and begin.
“The standard of wheat crops within the discipline is struggling considerably, and yields is not going to be nearly as good as 2022 resulting from a extreme lack of sunshine in July.
“Shoppers are reporting that wheat yields are more likely to common nearer to 8t/ha, whereas in 2022, they have been nearer to 10t/ha.”
Chatterton identified that costs have skilled a “sizable lower”, with feed wheat presently buying and selling at £180/t, down from a peak of £350/t in July 2022 or £240/t this time final 12 months.
Chatterton mentioned there was excessive volatility within the commodity markets since February 2022 resulting from warfare in Ukraine.
“Enter prices have additionally risen, particularly fertiliser, with the worth peaking at 800/t in summer time 2022,” he mentioned.
“Gas and electrical energy costs have additionally seen an enormous enhance through the 2022/23 crop 12 months.
“In addition to coping with the climate and market volatility, farmers have the added strain of managing enter purchases and crop promoting.”
Along with this, Chatterton mentioned, the upper income from harvest 2022 will end in greater tax payments and plenty of of those will probably be due in January of 2024 – when financial institution balances are “more likely to be dwindling”.
“It has by no means been extra essential to plan forward and work along with your accountant to make sure that your corporation is ready for what’s to come back,” he mentioned.