GOOD HARVEST - AWFUL FUTURE

It was the year of the Sale. This time last year we were farming three thousand acres. Today we are farming two thousand. Every farmer always wants to farm a few more acres, and we are no exceptions. Yet the future now looks so difficult it is time to take drastic measures. And those drastic measures have only one objective: to free ourselves from all debt.

It all looked so different ten years ago. Yields had doubled in the previous decade. In 1971 we aimed at getting 40cwt of wheat per acre (5 tonnes/hectare) and were moderately satisfied with 30cwt/acre (3.7 tonnes/hectare). By the end of the 1970s we were aiming at 80cwt/acre (10 tonnes/hectare) and were fairly satisfied with 65cwt/acre (8 t onnes/hectare). Our only problem then was what to do with all the money we made. We spent it on shiny new machinery and congratulated ourselves on the fact that we did not have to pay tax. (We carefully overlooked the fact that the overdraft climbed ever higher.) But the better way to spend profits was to buy land, and for as time it looked as if this was the perfect solution. Not only did it give us more land to farm, but the value of the stuff appeared to double every five years. We couldnít go wro ng. Or so it seemed.

Ten years ago we were farming 2900 acres with 16 people (albeit with beef cattle and sheep). This year we farmed 3000 acres with 6 people (and no livestock). The casual observer might assume that we must have become much more efficient. He would be right. He might also assume that we should comfortably survive any price cuts. He would be wrong. Being a big farm today will not guarantee survival tomorrow. The fact that your tractors may be 200 horsepower, your fields 200 acre s and your yields 200% of the average will count for nothing in the future when Mr MacSharry brings in his reforms. There is only one thing which will enable a farmer to survive. It is not his size, it is not his yields, it is not even his skill as a grower of crops or animals (though this helps). It will be simply whether or not his fixed costs are low. He may be the finest farmer in the world, but if he is saddled with a  mortgage, an overdraft and a high wages bill, he will go bankrupt.

It was to avoid this fate that we reluctantly sold one third of the farm, and in so doing ensured that we face the future without owing anyone a penny.

WINTER WHEAT

Not a bad harvest, but not a great one either. 1800 acres of wheat averaged 64cwt/acre (7.9 tonnes/ha), which was quite an improvement over last yearís 57cwt/acre. It is interesting that the figure for the 2000 acres we still farm was nearer 66cwt while for the 1000 acres we sold at Duxford the yield was just over 60cwt. We we re lucky that on two occasions in June we had very heavy storms which appear to have missed much of the surrounding area. Of the varieties we grew Riband produced yet another excellent performance. Even the third year crops managed 65cwt per acre (8 tonnes/ha), which is exceptional on this land. Beaver did magnificently, averaging 75 cwt/acre (9.2 tonnes/ha), but it should be remembered that most of these fields were first wheats. Haven did not disgrace itself either, managing to average around 70cwt /acre (8.6 tonnes/ha).

The breadmaking wheats told a very different story. We had taken a calculated gamble last autumn in drilling a big acreage of Mercia in the hopes that the seed trade had got its sums wrong and there would be a shortage. As it turns out, there was a shortage so the premium was good. But the yields of Mercia were extremely disappointing, averaging under 60cwt per acre (7.5 tonnes/ha). Yet compared to the new and much-heralded quality wheat, Hereward, Mercia did well. Poor He reward. A first year field (on admittedly thin land) managed a pathetic 54cwt per acre (6.7 tonnes/ha). It was hardly surprising that the seed trade found the variety difficult to sell. Once again it did not pay to grow breadmaking wheats. Once again the experts are wrong when they beseech farmers to grow these wheats because ìthey are what the market wantsî.

Next year we shall be persevering with the same varieties. Sadly, our friends at PBI seem to have lost their knack at coming up with at le ast two new wheat varieties every year. Whether this is because John Bingham has now retired or is simply bad luck will remain unclear for a few more years.

OILSEED RAPE

A poor, but not disastrous year. We grew two varieties, Silex and Lictor, but could see no real difference between them. The yield on 245 acres (100 ha) averaged 25 cwt/acre (3 tonnes/ha) which was enough to show a small profit, even though the price was 15% lower than last year. The outlook for rape is, however, good. Ne xt year the price will fall to around £130 per tonne but there will be an area payment of approximately £155 per acre. This will mean our gross income per acre should rise a bit. Thank you, Mr MacSharry.

WINTER BEANS

After two appalling years with spring beans, we started growing the winter variety for the first time in three decades. The crop looked magnificent throughout the summer, but the eventual yield of  30cwt/acre (3.7 tonnes/ha) was very disappointing. We shall pe rsevere next year with winter beans.

PEAS

The crop of the year. Superlatives fail when trying to describe the results. For the past ten years we have been growing peas with absolutely no success at all, so perhaps we were due for a good year. Previously we have averaged around 28cwt per acre, with the best field managing just over 30 cwt/acre (3.7 tonnes/ha). This year, growing the varieties Solara and Bohatyr, we averaged 45cwt/acre (5.6 tonnes/ha) on 190 acres (77 hectares). Quite why a nd how we managed this remains (as usual in farming) unclear. The weather - and in particular the rain in June - was clearly crucial.

Yet in spite of this triumph, we shall not be growing peas next year. The area payment on oilseeds is sufficiently generous to induce us to grow spring oilseed rape instead of peas. We shall, as the Americans say, be ìfarming the system and not farming the cropî.

SUGAR BEET

It looks like a vintage year even though, at the time of writing,  a third of the crop is still in the ground. We increased our acreage this year because yields for the past two years had been below average and we wanted to ensure a good output of beet this year to preserve our quota. We need not have bothered. It looks as if we shall average more than 20 tonnes per acre (50 tonnes/hectare) and thus will comfortably exceed out A and B quotas.

MACHINERY

The quietest and most boring year we have ever known. We bought only one piece of new equipment: a Daihatsu jeep to replace a Peugeot van. On the second-hand front we bought a large (6 tonne) Bredal spreader which will enable us to spread all our phosphate and potash without the help of a contractor. In spite of the fact that we reduced the acreage by one third, we kept all the machinery with the exception of one Claas Dominator 108SL Maxi combine, which we sold.

The outlook for more investment next year is equally dismal.

THE FUTURE

In the Annual report for 1981 I wrote ìA cereal surplus is ba d enough, but when it is sold at prices some twenty percent above world levels it is clearly intolerable for consumers and taxpayers.î Ten years later we are beginning to feel the effects of this problem as Ray MacSharryís reforms draw ever closer. The precise details are still uncertain, but it is completely inevitable that the new CAP will be bad news for large East Anglian farms like this one. MacSharry has three main objectives which are (1) reduce agricultural production in the EC, (2) cut the l ink between the subsidies and production and (3) keep the small peasants of southern Europe on their farms.

In practice what this will mean is that we shall have a choice. Either we leave the comfy subsidised world of the Common Agricultural Policy and sell our produce at the world market price - with no subsidies or support at all - or we shall be able to play the subsidy game, but under very new rules. The most significant of these rules will be that we must buy an entry ticket to the subsidy game. And this entry ticket will be that we will have to setaside 15% of our land with no compensation whatsoever. In our case this will mean fallowing three hundred acres.

Having bought this ticket, we will still have to sell our wheat at the world market price (estimated as roughly £80 per tonne) but there is some good news too. In return for doing this we shall be paid £104 per acre for every acre of wheat we grow.

The effect will be profound. Just like the linseed regime to day, where the actual yield is almost unimportant (because the price is so low) and what matters is the acreage subsidy you receive for every acre of the crop you grow, the same will happen with wheat. So all of a sudden we will worry much less about our yields and more about how many acres we are growing.

And we are not talking about the distant future either. It appears that the  new regime will apply for harvest 1993, so it will start affecting us in less than twelve monthís time, in the autumn next year when we drill our winter corn.

As an indication of what we shall be up against in the world marketplace, here are some figures from a wheat farmer called Alan States I visited in Kansas this autumn. His farm itself is extremely similar to Thriplow in size, but the figures show some very great differences too. The crucial fact is that that Alan States in Kansas can produce wheat at £65 per tonne while we will struggle to get below £80. That is our dilemma.

In t he meanwhile we have at least put ourselves in a strong position from which to face the future. We are free of all debt and ready to take advantage of any opportunity which may appear in the next few years as less fortunate farmers find that the pressure becomes intolerable. It is not fun farming fewer acres than we did last year, but it certainly makes life more relaxed. And that canít be a bad thing.
 
 

 Kansas  Thriplow
 
Wheat price(£/tonne) 74.00 111.00
Yield (cwt/acre) 22 64
GROSS INCOME (£/ACRE) 81.40 355.20
 
 £/acre £/acre
Seed 2.90 19.00
Fertiliser 9.90 33.00
Sprays 7.20 41.00
TOTAL VARIABLE COSTS 20.00 93.00
 
Labour 3.00 30.00
Contractor combine 12.10 0.00
Machinery repairs 5.00 14.00
Electricity/energy 0.50 3.00
Office expenses 0.10 1.00
Professional fees 0.10 3.00
Rates etc 1.00 2.00
Depreciation 4.20 30.00
Rent 17.80 47.50
Bank interest 1.00 0.00
Insurance 1.30 7.00
Travel 0.20 1.00
Telephone 0.50 2.00
Fuel 2.90 9.00
Sundry 0.70 11.00
TOTAL FIXED COSTS/ACRE 50.40 160.50
 
GROSS MARGIN/ACRE 61.40 262.20
 
Variable cost/tonne 18.18 29.06
Fixed Cost/tonne 45.82 50.16
BREAKEVEN PRICE/TONNE £64 £79.22
 
 
 

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