Farmers hit as profits plunge

Farmers are suffering anxiety and depression – and some will quit the industry – after figures revealed a drastic decline in incomes this year because of appalling weather and low farmgate prices.

According to the Government's farm business income forecasts for the financial year ending February 2013, a substantial reduction in profitability is expected across the majority of farming sectors.

Weather-impacted output, coupled with increased input costs, have hit the industry hard over the last year, particularly in the South West, with its high numbers of hill farmers.

The news that things were not going to get better would be a blow to many, said Jo Jones, co-ordinator of the Farm Crisis Network (FCN) in Devon. "It is a struggle for a lot of farmers," she said.

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"There will be a certain number who will have to make the decision about whether to carry on or whether to leave farming.

"Farmers are saying that, unless there's a remarkably good spring, it will have been back-to-back bad years. This is taking its toll on some people who are feeling the pressure and suffering from anxiety and depression."

The FCN provides pastoral and practical support to farming people during their most difficult periods and Mrs Jones said the number of calls they had received in the last two months had increased.

Government forecasts show profitability for the pig and dairy sectors falling by 50% and 42% respectively. For beef and sheep producers, falls of 44% are predicted for lowland producers, while their uplands counterparts have fared worse, with income falling by 52%.

Average farm incomes for pig enterprises are forecast to fall to £19,000 in 2012/13 from £38,000 in 2011/12.

On dairy farms, average income is predicted to fall to £50,000 from £86,500.

Lowland-grazing livestock farms are expected to see a fall in average incomes to £18,000 from £32,000, with upland grazing to £14,000 from £29,000.

Only the poultry sector remains unchanged, according to the forecast.

Melanie Squires, the South West director of the National Farmers' Union, said: "The figures make sobering reading, but will be no surprise for many in the industry. Wheat yield and quality were hit by the weather, while it's been well documented that rising costs outstripped farm-gate price changes for dairy and pork producers at times over the last year.

"More recently, we can add the plummeting lamb price to the list of challenges the industry faces."

The NFU said the figures should serve as a reminder that the Single Farm Payments subsidies act as a lifeline for many farm businesses and play a vital role when it comes to adapting to increasingly volatile markets.

The weather caused chaos across the board during the past year and laid bare the importance of Common Agricultural Policy payments, said Mrs Squires.

With profits squeezed, a larger number of farmers would again be forced to rely on direct payments to underpin their business in the year ahead.

Livestock producers have been among the hardest hit and sheep farmers in the Westcountry say they are being undermined by a triple whammy, just when they are at their busiest with the lambing season.

While farm-gate prices have dropped by nearly a quarter and wholesale prices for legs of lamb are down 17%, prices in the shops have only fallen by 2% in the same time period.

At the same time, Schmallenberg, a virus which causes fatal birth deformities, is taking its toll. "Financially it is devastating," said Mark Thomas, who farms 250 ewes at Treguddick, South Petherwin, near Launceston. "Ewes which lambed before Christmas suffered the most.

"A hundred ewes, on average, would have reared 150 lambs between them. When ready to market, these Easter-trade lambs fetch around £90 each. That's a £13,500 return, excluding costs of production."

But this year Schmallenberg had infected half of those ewes, causing them to abort or produce deformed lambs. So 100 ewes were producing just 75 lambs, to return £6,750 at market.

NFU livestock board chairman Charles Sercombe said that the farm-gate price for lamb was not viable and was unsustainable.