Confidence is rising as bank reports more farm contacts

A cautious improvement in farm business confidence in the second half of 2013 has been welcomed by Clydesdale and Yorkshire Bank

Tractor on pastureland
Tractor on pastureland

A cautious improvement in farm business confidence in the second half of 2013 has been welcomed by Clydesdale and Yorkshire Bank, reporting a growth in farmer requests for funding coming from all sectors in recent months.

Head of agribusiness David Hannon said: “While the year began with many businesses facing a tough challenge due to the impact of extreme weather conditions, we’ve seen a slow but steady revival in confidence among producers in recent months.

“As a result, the industry is displaying a stronger commercial platform going into 2014 than was the case in January 2013.

“Uncertainty always has a slowing effect on business planning and development, of course, and the past few years of CAP Reform debate, followed now by the process of CAP Reform consultation and implementation, has made this aspect of farm business management extremely demanding for producers.

“Although we seem to be nearing the end of this process, businesses won’t experience full release from uncertainty until the final division of rural support is settled.

“However, being able to even talk about improving business confidence today, less than 12 months after many areas suffered heavy stock and crop losses, is a remarkable illustration of farming resilience.

“Although individual sector performance always differs from one part of the UK to the other, our general experience has been that of a broadly-based rebuilding of ambition, reaching us from all parts of the industry.

“Dairy farmers, for example, have enjoyed a lift in milk price this year, alongside a reduction in some input costs. Beef and lamb values also showed some gains, albeit in the face of continued concerns over livestock numbers.

“Arable farmers, meanwhile, had a much easier harvesting period than for some time.

“Even though grain prices remain disappointing for growers, yield advances have at least retained some balance to the sector.

“Clearly, concerns remain for each sector, as there always are in farming with its exposure to weather, yield and pricing variability.

“Nevertheless, the overall commercial platform for farming, going forward into 2014, shows there has been definite progress in the past year.

“Once a settled position is reached on CAP implementation, many producers will be ready and able to explore the best way forward for their business, even though the support structures of the past are changing and the total ‘support pot’ is reduced.

“The willingness of many to embrace the challenge of 2014, and the opportunities which change always brings, is already clear and deserves to be welcomed fully on behalf of an industry whose resilience is never in doubt.”

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