YORKSHIRE FARMERS WARNED ABOUT VOLATILE WORLD MARKET

A recovering UK economy has failed to assist the struggling agricultural sector, and there is no immediate prospect of assistance to lighten the gloom.

Speaking at the Yorkshire Farmers’ Conference yesterday (Wednesday March 15) keynote speaker Trevor Williams described the agricultural sector’s plight as being due to “cost pressures, lack of control over input and output prices and import competition”.

The conference was also given a comprehensive overview of the grain market and its future prospects from David Sheppard, managing director of the UK’s third largest grain merchants, Gleadell Agriculture. David, who has been in the grain trade for 21 years, predicted growth in the industrial energy sector and the domestic market, combined with the continuing volatility that the market has seen for the past few years.

Mr Sheppard drew attention to the issues facing growers post Mid Term Review (MTR) and the Single Payment Scheme (SPS), and warned the conference:

“There is a need for farmers to choose their grain trade partner carefully, in order to put in place a good risk management strategy covering all available markets and products.”

Mr Williams, chief economist with Lloyds TSB, told the audience of farmers from across the region that although UK economic growth had slowed due to a weakening housing market, higher interest rates and higher unemployment, this was expected to be only temporary and that the economy would expand by 2.5% in 2006 and 2.9% in 2007.

Lower interest rates since August 2005 and continued growth in the services sector and global economy were encouraging the UK recovery.

However, he cautioned the conference: “The world economy is in its best shape for decades, but worries persist about growth – oil prices, UK trade deficit, UK fiscal position – these are all issues worth worrying about. Compared with Europe as a whole, the UK has been a success in the last five years, due to more flexible labour markets, but it must not get complacent about this as it has been partly due to working longer hours.”

The conference, at York racecourse, was organised by Carter Jonas and AMC. AMC regional agricultural manager Adrian Cawood opened the event saying that the conference was being held to assist with decision making for the future. “We are, by definition, moving to a freer market and thus more volatility, with questions marks over issues such as interest rates and exchange rates.”

Andrew Fallows, partner with Carter Jonas York office, closed the conference with a presentation on Land and Entitlements – Old and New Markets, and said: “The agricultural industry continues to experience cash flow problems because of the delay receiving the Single Payment. We envisage a livelier market in the late spring and early summer. The market itself will be governed by supply and demand, with well-equipped and located units continuing to meet with strong interest.”

Reproduced with kind permission of Carter Jonas.