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The cost of flooded farms

| Mark Chatterton | 9 January 2024

From 1 November through to 5 January, central Nottinghamshire has had the most rain anywhere in the UK and all farms, wherever they are, have been affected.

Streams and rivers have burst their banks, dykes have been unable to cope and water is standing in fields where it has never stood before.

We thought 2019 was bad - the worst flooding for many, many years - but this truly is unprecedented.

In 2019, the rains started in October, when many fields were undrilled so the damage was limited. This time, the rain began after winter wheat and barley had been planted in October. As a result, the work and expense of cultivating, drilling and carrying out pre-emergent sprays has been wasted with seed being flooded and failing to germinate.

Fields will now need to be drilled with a spring crop, but available seed is in very short supply: costs of £800/t rather than £300/t are being quoted for spring wheat and barley, for instance. Some farmers may have their own seed that can be dressed but most will not have this luxury because few farms grew spring varieties in 2023.

I expect that some farms may still be waterlogged until April but even when the fields are eventually dry enough for machinery, farms will then have to face the cost of cleaning up the debris, which is visible everywhere.

Meanwhile, livestock farmers, who have been moving stock to higher ground and providing feed in boats are likely to also find that the stress to sheep and cattle outside will lead to them losing condition and not being ready for spring markets.

All of this means that the floods this year have been far more costly for farmers than in 2019 and farms will face further costs as a direct result for years to come, likely with a poor harvest this year and poor cash flow for 2025.

Each year, we carry out a survey of farms in the East Midlands, covering 20,000 acres of farmland in the region, and the floods of 2019 were one of the main reasons why farm net profits reduced by 18% in 2020. This year, we expect profits to be much worse.

Speaking to farming families that had made all the right decisions, working day in and day out to run a profitable business only to find their profits washed away in front of their eyes is truly heartbreaking.

My advice is to create a new cash flow forecast, work out the impact that the situation will have for the next two years and work out ways to reduce costs throughout this period. This might mean putting off capital investments in property or carrying out non-urgent repairs and farmers should also look to draw on their private capital. Meanwhile, tax planning will be important because there will be large bills to pay on last year’s more successful harvest.

I’d urge farmers to seek out professional advice and support immediately. The specialist agriculture team I lead at Duncan & Toplis, which has offices across Nottinghamshire, Lincolnshire and Leicestershire, will be able to help many farms that have been affected.

These floods have devastated many livelihoods and although the anguish is palpable, it’s important not to be defeated. With prudent management and informed decision-making, farms can and will recover.

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