Farm businesses must become “shock-proof” in 2018, says Anglia Farmers chief
PUBLISHED: 17:12 11 December 2017 | UPDATED: 17:12 11 December 2017
Archant, Norfolk 2017
Farm businesses must focus on “shock-proofing” their incomes in the New Year to protect against unforeseen risks and political uncertainty, according to the head of a Norfolk-based buying group.
Jon Duffy, chief executive of the AF (Anglia Farmers) Group, based at Honingham Thorpe outside Norwich, said as 2018 is the last full year the UK will be in the European Union, he believes it is the year farmers should be “getting to grips with risk management” and cutting non-essential costs.
“The agricultural world is changing rapidly and some of the changes that we will see post-Brexit could be seismic,” he said. “By taking action now, agricultural businesses will be able to withstand, and even thrive, through such changes.
“Therefore, 2018 should be seen as the year to plan and to take control – to put the farming business into a shape that can withstand any income shock, and be able to take full advantage of the better times that will come.
“Doing a thorough benchmarking exercise in 2018 should be a must. Asking the simple questions of ‘how do I compare to others?’ and ‘what do I need to do to improve?’ should be part of everyone’s New Year resolutions.”
Mr Duffy said one of the first actions should be to look at costs.
“Getting costs under control is normally a good place to start when looking at control and risk management,” he said. “Non-vital costs should be removed.
“This is normally excess labour and machinery. Variable cost spend also needs to be rigorously examined.”
Mr Duffy said while political decisions in the coming months will “change the face of the industry forever”, many factors which determine the fortunes of farming will remain the same.
“The macro-agricultural world we live in is not changing because of Brexit,” he said. “The world’s population will still hit 10 billion and the trend of consuming more calories globally will continue.
“We have had four years now of relatively benign world weather and therefore production has kept up with demand. However, global stocks of the main agricultural commodities are not immune to major production issues. We will get bad years, stocks will decline, and prices will increase. The only difficulty is no-one knows when.”