Will Brexit Affect the Value of Your Farmland?

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Fears have been expressed by some land agents that agricultural land prices may fall in the UK, as a direct result of Brexit.

It is expected that the amount of subsidies, such as the Basic Payment Scheme, will decline once Britain leaves the EU, causing some farmers to re-consider their financial position.  Many are already struggling to make ends meet and a reduction in subsidy support, combined with a predicted interest-rate rise for borrowing, may result in many being forced to leave the industry.

As a consequence the demand for farmland could fall away, with the price per hectare dropping by as much as £1,000, despite it having remained fairly robust so far, at an average of around £7,500 for bare land.

However, even the experts admit it is difficult to predict the full impact of Brexit, with so many other factors coming into play, such as trade tariffs, pricing and food imports.  Post-referendum predictions of economic doom and gloom have not yet come to pass, so those in the industry would be wise not to panic at this stage.

Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.

Farmers – Analysis Breeds Performance.

Farmers – Analysis Breeds Performance.jpg

Whilst farming has its own key fields in which farmers and farm managers must succeed to eke out a profit, the importance of the “numbers” can often be misunderstood or forgotten about completely.

With the Brexit decision leaving many farmers wondering where the next subsidy is going to come from, cost analysis and performance monitoring can prove to be key factors in farmers turning a profit over the next few years of uncertainty.

For example, in the rearing of lambs, how many farmers can honestly say they can place a cost per head and therefore have a margin calculated for each lamb/ewe sold?

This is just one of the measures being taken by many farmers now in order to be able to consistently monitor their costs, and as a result, their bottom line. Cost control is proving to be the key difference between success and failure across all types of farming.

Of course, this requires an accurate and successful record keeping system. With this in place, realising and apportioning costs as necessary can often be the easier part of the process. And not to mention the smile on your accountant’s face when presented with your new records system.

Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.