Farm Tractors and Machinery

UK farmers thrive, immune from economic downturn

Written by admin on June 11, 2009 – 4:58 pm -

* Sharp decline in fertiliser prices boosts farm income
* UK tractor sales seen holding around 2008 record level
* Farmers take advantage of cheap borrowing to invest
By Nigel Hunt
WENDY, England, June 10 (Reuters) - As many search anxiously for signs of life in Britain's ailing economy, the nation's farmers are in a bullish mood, buoyed by a weak pound, strong prices for agricultural products and falling input costs.
"With agriculture looking more positive, people are taking the opportunity with interest rates where they are (low) to get on and make investments," Peter Kendall, president of the National Farmers Union, told Reuters on Wednesday.
"This is a sector that can borrow, can invest," he said while attending the country's major trade show for the arable sector, Cereals 2009.
Total income from farming in 2008 in the UK rose by 41.9 percent to 3.46 billion pounds ($5.67 billion), according to government data.
Many expect farm income to remain strong this year, boosted by the overall weakening in the value of the pound against the euro which has boosted European Union support payments and agricultural prices in sterling terms.
"We are certainly a lot better off than our counterparts in Europe who haven't got the currency advantage," Kendall said.
Mark Berrisford-Smith, senior economist with HSBC Bank, said the main EU farming support scheme, the single farm payment, would rise by about 10 to 20 percent this year for Britain's farmers due to currency movements. "Farming hasn't taken the knock that other sectors have had. Agriculture is benefitting from a lower exchange rate," Berrisford-Smith said.
CHEAPER FERTILISERS
Farmers have also received a boost with a sharp decline in the cost of fertilisers such as ammonium nitrate.
Ken Bowler, UK marketing manager for British fertiliser supplier GrowHow, said his company had just announced a price for ammonium nitrate for June delivery of 178 pounds a tonne, compared with 325 to 330 pounds a year ago. "We are reflecting lower energy costs and lower global commodity prices of nitrogen generally. The boom of commodity prices last year faded into the distant memory just before the turn of the year and we have seen a more realistic level.
GrowHow is a joint venture between Norway's Yara International and U.S. based Terra Industries.

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