2022 was a fantastic year for farmers - with a very successful harvest, resulting in both higher crop yields and higher prices. This year, however, the weather means that harvest has been very stop-and-start so far.
This reduced yield is a result of many different aspects, all of which have negatively impacted income this year, in comparison to 2022. The main factors include unstable markets due to the war in Ukraine, constantly changing weather and a lack of sunshine in the UK.
Here at Duncan & Toplis, we support over 800 agricultural businesses, covering 500,000 acres of farmland across the East Midlands. If you’re concerned about how the 2023 harvest will impact your farm, we can help put your mind at ease.
The quality of wheat crops in the field is suffering significantly, and yields will not be as good as 2022 due to a severe lack of sunshine in July. Clients are reporting that wheat yields are likely to average closer to eight tonnes per hectare, whereas in 2022, they were nearer to 10 tonnes per hectare.
Prices have also fallen, with feed wheat currently trading at £180 per tonne, down from a peak of £350 per tonne in July 2022 or £240 per tonne this time last year - a sizable decrease.
There has been so much volatility in the commodity markets since February 2022 due to the Russian invasion of Ukraine. Input costs have also risen, especially fertiliser, with the price peaking at 800/tonne in Summer 2022. Fuel and electricity prices have also seen a huge increase during the 2022/23 crop year.
As well as dealing with the weather and market volatility, farmers have the added pressure of managing input purchases and crop selling. In addition, the higher profits from harvest 2022 will give higher tax bills. Many of these will be due for payment in January 2024, when bank balances are likely to be dwindling.
It has never been more important to plan ahead and work with your accountant to ensure that your business is prepared for what is to come.
If you would like more information, support, or guidance on any matters relating to your arable business, please get in touch with our experienced team.
