We cannot afford to have high-cost production systems
One wonders where it will all end. If the current prices for beef, lamb and corn tell us anything, it is that any farming system that is not losing money is probably only operating on a shoe-string.
Look back 30 years ago when wheat was making £180/t. Now I am told it is fetching closer to €150/t. Convert the pounds to euro and you will see the catastrophic decline that has taken place and then do the same for the price of a fat lamb over a similar period.
It is all very scary stuff but one thing is sure, no one can continue farming at a loss. Either the EU increases the subsidies being paid to farmers to produce below-cost food, as is the current system, or we abandon subsidies altogether and go for the sharp shock that the New Zealanders opted for and seem to have survived.
Dairying is currently flavour of the month but how long will this last?
Demand creates supply and once supply has increased and enough farmers are tied in to higher production levels, then the purchasers could well put the boot in. This is where fancy milking parlours and expensive wintering facilities can become a millstone around a farmer’s neck.
Unless new buildings have been built with, at the very most, minimal borrowings, the repayments can eventually cause any enterprise to fail.
A friend told me of a young man who recently arrived in New Zealand to work for a year and learn their farming methods. What he encountered was amusing to hear about but must have been a severe shock to his system.
He arrived in the middle of their winter, and one of his tasks was to help milk 400 cows, all of which are kept outdoors. Milking is also carried out in the open air and he described the place as a sea of mud with 18 inches of snow to contend with.