Finance and Reality Checks

Published on: 08:23AM Oct 17, 2008

Pathetic – scabby, low yielding, risky and wormy and I’m not talking about the world financial crisis! Potato harvesting is now completed with a painfully poor quality crop which only half fills the store – but at least harvest 2008 is now truly finished, thank goodness.

One consolation is that we sell potatoes directly to the public and have control over final prices received. We usually pitch prices marginally below the local supermarkets and the selling price this season will range between £550 and £700 per tonne (approx $1100 to $1400 per ton) depending on bag size.
The end of September (Michaelmas) was the finish of another farming and financial year. Signs are - that this has been a reasonably good year reflecting the higher grain prices and a solid input from sheep and non farming enterprises. But next year will be very different. ‘Agflation’ is rife in all departments – fertiliser, fuel and spray costs are the tip of the iceberg – and the NFU (National Farmers Union) considers overall costs have increased by 35% to date and grain prices have fallen dramatically. Our mixed business economy will undoubtedly help the situation, but I should be spending more time on financial controls and analysis than I am currently doing.

Meanwhile the world financial situation collapses around us. The Bank of England has reduced base interest rates to 4.5% in concert with some other Central Banks. This means that most farm overdraft borrowings should now range between 5.5% and 6.5% provided the banks do not hike their rates over and above base – which is a strong possibility. The expected ‘fall out’ in the real economy will be great and already redundancy levels are rising as we slide into inevitable recession. But all is not lost – as  British taxpayers  we are now shareholders in the banking world and the new financial parlance has moved to discussing ‘bail outs’ in trillions, as if billions are out of date!  

On the practical side, over which I do have some control, I am pleased with the final oilseed rape seedbed that was eventually created in wet conditions – ploughing, power harrowing, then drilling and power harrowing in combination followed by a final rolling completed the job – but did nothing for global warming or my overtime bill!
To help break the work fixation a quick holiday in France with friends has provided a welcome break – and a good excuse to check out French wine and food. However, I must have looked more haggard than usual when returning on the London Underground because a delightful young lady offered me her seat, much to my wife’s amusement – a reality check or what!