Professional services
Better yields and prices deliver higher contract
farming returns • Returns average £353/ha in 2017 • Average net margin up by £125/ha • Advantages for tax and effi ciency
H
igher commodity prices, better yields and low- er variable costs saw returns from contract farming agreements rise for both farm- ers and contractors in 2017, says Strutt & Parker.
Provisional results from the
fi rm’s annual survey of contract farming agreements showed the average net margin for Harvest
2017 was £125/ha higher than the previous year. The survey covers 18,700ha of land mainly in the east of England, East Midlands and south-east England. Speaking at last month’s Cere-
als Event, Strutt & Parker’s farm- ing department director Richard Means said total returns to in- dividual farmers averaged some £353/ha in 2017 – around the fi ve-
year average – compared to £273/ ha in 2016. Total income to contractors
was similar at £367/ha in 2017 compared to £311/ha in 2016 – up from the lows experienced in 2015 and 2016 but still somewhat lower than the 10-year average.
Total returns Mr Means said: “It is really pleas- ing to see an upturn in the total returns to both parties, compared with 2016 thanks to higher crops prices and better yields, and all despite a signifi cant area of oil- seed rape in the east and south east of England being written off during autumn 2016. “Another factor was the drop in variable costs which were at their lowest level since 2011 as a result of lower fertiliser costs, reduced fungicide expenditure in the dry 2017 spring and oilseed rape crops being replaced by low- er input crops.
“What is also very positive is to see an increase in the divisi- ble surplus, which is the revenue that can be divided between the
farmer and contractor after var- iable costs, fi xed costs, the con- tractor’s charge and farmer’s re- tention have been deducted from
Serving East Anglia’s farming communities for 90-years
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www.lovewell-blake.co.uk 58 ANGLIA FARMER • JULY 2018
Contact Chris Solt t: (01603) 663300
www.whitingandpartners.co.uk
Bury St. Edmunds | Ely | Huntingdon | King’s Lynn | March | Mildenhall Peterborough | Ramsey | St. Ives | St. Neots | Wisbech
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