Contract Farming Results - Harvest 2009
16 June 2010With world prices under pressure from near record yields, volatility and uncertainty in the global economy and a spike in production costs saw net profits cut by a third on the 2009 harvest results from Bidwells contract farm management agreements.
David Cousins, Head of Farm Management at Bidwells Agribusiness commented "net profit has fallen from £552/ha to £368/ha, a figure that will not surprise many people given the spike in variable costs, especially fertiliser."
The results, taken from Bidwells 90 contract farming agreements across the UK show that the Single Farm Payment accounted for 70% of net profit, compared with 40% of net profit in the previous two years. "Variable costs increased by 43% reaching £430/ha with the five year average increasing to £311/ha from £258/ha.
Looking forward to 2010, Mr Cousins notes that gross margins on many crops will better as a result of the re-alignment in fertiliser supplies and pricing. However, global production is likely to be substantial with another large harvest forecast which means in the short term pressure will remain on combinable crop prices.
"The most successful businesses will continue to focus on operational and technical excellence, but become increasingly sophisticated in how they manage marketing risks" concludes Mr Cousins "the one thing that is certain is more uncertainty."
Download the Bidwells 2009 analysed harvest results: Contract farming results 2010 (pdf).
Contact us
For further information please contact David Cousins on 01223 559 310 or email.
