Appalling weather and consequent rocketing feed costs are combining to push confidence among farmers to a new low.
And a drop in prices paid for sheep is adding to agricultural despondency.
A new survey carried out by the National Farmers’ Union (NFU) indicates dented farmer confidence, especially in the short-term.
Lamb prices have plummeted – leading to demands that the big retailers should stop playing store wars over prices and that both processors and retailers should take a long-term view and avoid sending out further negative signals to farmers.
Last week prime lambs were selling for slightly over 150p per kilo at South Molton market in North Devon. This time last year the average was almost £2 per kilo.
“The boom-bust cycle of sheep pricing is not in the interests of the farmer, processor or retailer – and sending out negative price signals is damaging to the entire sector,” said Andrew Butler, NFU acting regional director. “The poor summer and rising input costs are continuing to erode margins.”
The poor lamb prices have come at a time when the national flock is showing signs of increasing, and British lamb is in demand on both home and export markets.
The survey says that farmers remain generally optimistic about the future of agriculture.
NFU chief economist Phil Bicknell said the results came as “no surprise” given the exceptional year many farmers had experienced.
“The challenging year we’ve had makes it easy to forget that farming has been something of a success story in recent years, increasing its contribution to the economy, creating jobs, and seeing improvements in farm profitability,” he said.
Results from the survey, now in its third year, showed that last year’s relatively optimistic outlook had faded, and only 22 per cent of farmers surveyed were confident about the year ahead, compared to nearly one in two 12 months ago.
Some 42 per cent of farmers told the NFU survey team they thought that their businesses were in for a tough year.
Mr Bicknell explained: “Rising feed costs have been well documented in recent months, and the confidence of pork, dairy and red-meat producers has tumbled as animal-feed costs have risen.
"While other sectors show confidence rising in the long-term, over the next five years this remains weak for red meat and pork. Tight supplies already characterise these markets and both sectors need greater confidence if we’re to see them able to respond.”