Loam Farm 2014 Update

In preparation for the Cereals Event the Andersons’ Loam Farm Model has been updated.  Loam Farm is a notional business, located in East Anglia, which has been running since 1991 and tracks the fortunes of combinable cropping farms.  It comprises of a 600 hectare (1,480 acre) combinable crop farm running a simple rotation of milling wheat, WOSR, feed wheat, and spring beans.  Of the cropped area, 240 Ha are owned and 360 Ha rented on FBTs.  There is a working proprietor plus one full-time man and harvest casual. 

The profits for 2012 may look high, given the weather that year.  But it must be remembered that Loam Farm is located in East Anglia; although yields and quality were affected, this was far less pronounced than further west and north.  The farm benefitted from the very high prices. The 2013 year was affected by the problems of getting crops established.  With prices sliding, profits were reduced compared with 2012. 

For 2014, crops currently look good and yields are forecast to return to normal levels (or even just above average). Lower prices see overall output reduce and there are some variable cost savings largely due to cheaper fertiliser.  Whilst the overall farm gross margin is not that different to 2013 the margin from the farming operation drops due to higher overheads and rent and finance.  Loam Farm has two FBT agreements and one came up for renewal in autumn 2013, the other in autumn 2014.  Both agreements have seen rises to £375 per hectare (£150 per acre) to secure the land.  This has pushed up costs for both 2014 and 2015, although this level of rents is still below many of the ‘tenders’ being offered.  

For more information and discussion on the Loam Farm results Andersons will be at the Cereals Event at Chrishall Grange near Duxford on Wednesday 11^th and Thursday 12^th June, on Stand 7-G-750.