By FGP on 20th August 2019
The settlement of farmer compensation claims is a major part of FGP’s annual workload. Farm outputs are notoriously difficult to predict with so much dependant on weather during the growing months. Couple that with the variance in world commodity markets and providing budgets for infrastructure developers can be a headache. There are though likely ranges for different types of land and cropping so FGP monitor the position throughout the season to give as realistic prediction as possible.
So what can be expected in compensation claims for the 2019 season? After two years of shortages in animal fodder, grassland has caught up with plentiful supplies of silage and it seems near record hay production. This should be reflected in lower claims for grassland and a return to normality for straw prices.
Harvesting got off to a roaring start on good looking barley crops for a few days before intermittent storms intervened. Evenso, most of the barley has been cut with good quality and yields but the oilseed rape crop looks to be disappointing. Farmers will be getting nervous about the wheat but at the moment if the weather is kind it will be a good quality crop of above average yield.
In the background, is the matter of diminishing farm support. The transition from the current Basic Payment Scheme to a new post-Brexit Environmental Land Management Scheme is expected to begin in 2021 and complete by 2027, with BPS payments gradually reduced year-on-year and environmental payments increased. The proposal lies within the Agricultural Bill proceeding through Parliament and currently stalled within the political mire. If the proposals reach fruition, then post 2026 the losses attributable to farm support are likely to be complex and vary greatly farm to farm.
On the acquisition front, farm land prices are largely stalled or marginally downward. Local competition does still produce spikes in land prices but overall FGP expect the farm land market to stay where it is for a few more years.