FW Sentiment Survey: Optimism in short supply for 2025
Any sense of optimism for the year ahead is proving hard to find, with recent and impending changes to government policy putting a massive dent in farmer confidence across the UK.
Our annual Sentiment Survey, conducted during late October and early November, always asks how farmers feel about their prospects for the next six months and the next two years.
Comparing eight years’ worth of data, the prospects have never looked gloomier.
See also: FW Survey 2024 – Politics and weather weigh heavy on the sector
As the graph below illustrates, almost half of all farmers surveyed said they felt either “fairly pessimistic” or “very pessimistic” about the next six months – a figure which rises to 56% for the two-year outlook.
This is the first time since 2017 that the “pessimists” have outweighed both the “optimists” and the “neutrals”, reflecting the torrid time the whole industry has been facing.
Taking short-term prospects in isolation, the 17% who said they felt upbeat about the next six months is less than half the proportion who felt that way in 2022, when the industry was riding high on the commodity price spike following Russia’s invasion of Ukraine.
Correspondingly, those feeling pessimistic about the six months to come has almost doubled over the past two years, to 49%.
This downbeat view comes on top of a decidedly dismal 2024, when the numbers reporting a “bad” or “terrible” year grew from 31% to 37%.
Differences
As ever, there are some sectoral differences, and it seems that dairy farmers are actually quite positive about the next six months, with 33% describing themselves as either “optimistic” or “very optimistic”.
Farmgate milk prices have been climbing since April this year, from about 38p/litre to more than 45p/litre on average, while numbers quitting the sector have slowed.
Market prospects for butter, cream and cheddar also remain fairly strong for the early part of 2025.
In contrast, arable farmers have the most downbeat six-month outlook – especially oilseed rape growers, with just 11% saying they feel either “optimistic” or “very optimistic”, compared with 59% who feel “pessimistic” or “very pessimistic”.
Growing oilseed rape continues to be a challenge, both agronomically and financially.
The loss of neonicotinoids from the seed treatment armoury has left crops extremely exposed to flea beetle attack, while geopolitical developments have injected further uncertainty into the markets.
There are particular concerns about what effect US tariffs could have once Donald Trump re-enters the White House in January, with Canadian rapeseed likely to be displaced from the US market.
The UK oilseed rape area for 2025 is predicted to be the lowest in 40 years, making us even more dependent on imports.
Reasoning
Oilseed rape growers aside, the reason for the more generally negative outlook among farmers is not hard to find.
In 2022, when asked what the greatest challenge might be for the year ahead, farmers were most wary of “rising input costs” (37%) – and they weren’t wrong, as items such as feed, fertiliser, and fuel went through the roof.
When asked the same question in 2023, it was the “market conditions for outputs” that topped the list of concerns (23%).
On this score they were partly right. Feed wheat certainly bumbled along between £150/t and £190/t for much of 2024, though cattle, sheep and pig prices maintained their relatively firm values, and even milk prices enjoyed some recovery.
But when we asked that question in 2024, “government policy” soared to the top of the list, with more than half (52%) citing it as their number one challenge.
The impact of the Autumn Budget has been significant, but even before that there were real worries emerging given the slow rollout of new government support schemes and the broader direction of travel following the general election in July.
Regional differences
Again, there are regional differences to be found. The preoccupation with government policy is fairly uniform across all regions of England, while farmers in Wales seem especially concerned, with 69% citing it as the number one challenge for 2025.
Welsh farmers clearly have a good deal more recent experience of operating under a Labour government than other parts of the UK, and issues such as bovine TB, tight controls on slurry spreading, and plans for the new Sustainable Farming Scheme have led to much disenchantment.
Conversely, farmers in Scotland seem slightly more relaxed as the move towards a new farm support scheme has been slower, and there is every prospect of some retention of coupled supports in future.
The recent Scottish Budget also saw a small increase in funding for agriculture, and the temporary rollover of existing support schemes.
Inputs v outputs
While government policy has shot up the list of farmer concerns for 2025, and they are also wary of yet more extreme weather, there seems to be an expectation that input prices will outstrip output values. Almost half anticipate a slight rise in input costs, while a quarter are anticipating a “significant” increase.
Succession planning and pensions
The recent announcement of government plans to introduce 20% inheritance tax (IHT) on farm assets worth more than £1m has raised awareness of the need for proper succession planning.
Defra and Treasury ministers have been quick to point out that the tax can be avoided if assets are transferred sooner rather than later, and the donor survives for at least seven years.
There may be other ways of reducing the impact too, such as splitting ownership, establishing a company structure, and taking out life insurance – though all have their complexities and costs.
Whatever the permutations, one clear message from the recent furore over the Autumn Budget is that succession planning is something that cannot be put off to another day.
But, as our Sentiment Survey reveals, there is still a lot of work to be done.
When asked if they had a robust succession plan in pace for their business, just 33% were able to answer “yes”. Farmers with renewable energy and forestry on site were the most likely to have sorted out succession.
The need for farmers to arrange their pension provision is also apparent, with an even split between those who have and those who have not made arrangements.
Perhaps not surprisingly, farm managers were most likely to have a pension plan in place, owner-occupiers the least likely, and tenants somewhere in between.
Labour availability a major issue for some
As a leading light in the area of agricultural recruitment, training body Lantra was keen to find out more about labour availability and staff communication.
The Sentiment Survey revealed that finding and then retaining staff is indeed a problem for the majority of farm businesses, though many (45%) say they “get there in the end”.
The vegetable sector stood out as the one where it is a real challenge, with almost half saying sourcing labour was a major problem in terms of their business planning.
It also emerged that those farmers with the most difficulty securing labour were also the least able to take time away from the farm.
More encouragingly, the survey revealed a general willingness amongst farmers to discuss the pressures and demands of their businesses with their staff, with seven out of 10 saying they do so regularly.
Sponsor’s comment
Lantra continues to support farmers and the agricultural industry through developing high-quality training and qualifications, recognised by industry.
We also remain committed to improving the apprenticeship program for agriculture.
By listening to your feedback, Lantra ensures that training is fit for purpose, so you can grow your skills to meet the needs of today, and the future, in an ever-changing environment.
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About the survey
- Conducted late October/early November
- 767 respondents
- 82% owner-occupiers, 14% tenants, 5% farm managers
- Strong spread by region and farm type
- Average farm size 245ha
- Average age 59