Large farms are more profitable, reveals report
Large farms are more profitable, reveals report
By Tim Relf
LARGE farms make more money because they get higher yields and a better price for their crops, reveals a newly published University of Cambridge survey.
It shows that, in the 1996 harvest year, winter wheat and barley yields were 34% and 37% higher, respectively, in the over 80ha group compared with smaller farms.
Timing of sales is also crucial. Those who sold grain at harvest 1996 managed to obtain some "respectable" prices; others, hoping for an upturn, held off – only to see the market fall.
The milling wheat premium – which had declined since 1993, prompting people to grow less – rose slightly to 10%. According to report author, Carol Asby, people may now respond to the slump in incomes by growing more varieties which can attract a premium.
By 1996, farmers were also bolder in their choice of minority varieties which accounted for 20% of the wheat and barley area, double the previous years figure.
The area sown to wheat has risen, meanwhile, as the set-aside rate has dropped and farmers have been attracted by its relatively high gross margins. In harvest 1996 year this came to £856/ha.
Assuming yields and variable costs do not change, Ms Asby predicts the Agenda 2000 proposals would knock 28% off the top-quarter of farmers winter wheat gross margin. For the bottom group, the drop would be 21% to £529/ha.
• Economics of Wheat and Barley Production in Great Britain, 1996/97. Available for £13 from Cambridge University (01223- 337166)