Farmer Confidence Survey
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1 Farmer Confidence Survey December 2012
2 About the confidence survey 2012 is the third year of the National Farmers Union s annual confidence survey, which looks into: Farmers attitudes towards the future of their industry The confidence they have in their farm business Business profitability External factors that may impact their businesses Planned production levels in the short and medium term Future intentions to invest Business longevity i.e. how long will the business stay in operation
3 Sample Method 536 NFU Farmer & Grower members and a minority of non-members were interviewed in 2012 by self-selection (online and paper based) and telephone The fieldwork was carried out in October and November 2012 (changed from July in 2010 & 2011 to better match other studies) Between 50 and 117 interviews from all main farm types Between 47 and 109 respondents surveyed from each region of England & Wales Weightings As in previous years, the overall results have been weighted to represent the proportions of main farm types in England and Wales.
4 2012 at a glance...
5 Talking about the weather. Weather impact beyond anyone s recollection and has had a very negative impact and almost destroyed our business. Apprehensive getting out of winter but also what will next summer be like. We can manage for 1 year. Hope it is just a one off, as can`t set strategy for one in a 100 years event. Beef / sheep farmer, North West England Next years crops (will be) affected by this years weather. Arable Farmer, West Midlands Planting for next year has not gone well due to weather Farming at the moment is psychologically difficult Mixed Arable & Livestock Farmer, East Anglia Business is very weather dependent. This year so bad, major decline in turnover. Horticulture / Potato grower, South East England Weather has been terrible and there will be a lot of bankruptcies in farming this year. The weather has affected everything. Beef / sheep farmer, South East England
6 Negative impacts shaping the year ahead Input prices Regulation & legislation Economic conditions Common Agricultural Policy Animal health issues* Output prices Access to bank lending Labour supply** Your supply chain Succession of the farm Consumption levels of British produce 27% 31% 20% 24% 16% 21% 13% 19% 13% 18% 7% 10% 11% 10% 38% 39% 47% 48% 60% 67% 76% * Excludes Arable & Horticulture ** Excludes those with no employees 82% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Little change since 2011 in terms of the external factors expected to negatively impact farm businesses in the coming year the big 4 remain the same.
7 Short-term confidence: the next 12 months Q. Compared to the last 12 months, how would you rate your overall confidence in the prospects facing your farm business for the next 12 months? 20 45% 40% 35% % 39% +100 optimistic % 25% 20% 17% 22% 25% 21% 18% % -5 10% 5% 8% 9% 4% -10 0% Much less A litle less confident (-100) confident (-50) The same (0) A little more confident (50) Much more confident (100) -100 pessimistic NFU members have a negative outlook in the short term. A marked year on year swing to reduced confidence in future farm prospects.
8 Short-term sector confidence: the next 12 months +100 optimistic Arable Beef / Sheep Dairy Horticulture Mixed Pigs Poultry pessimistic -40 NB Average confidence scores for each farm type are shown above (based on a -100, -50, zero, 50, 100 scale) for both 2011 and It s worth noting that although there are farmers with positive and farmers with negative outlooks for all sectors the figures shown above represent the sector overall. Short term confidence dipped across most sectors, with no sector having a positive outlook for the twelve months ahead. Impact of higher feed costs casts a shadow over livestock producers.
9 Mid-term confidence: the next 5 years Q. Compared to the last 12 months, how would you rate your overall confidence in the prospects facing your farm business for the next 5 years? 20 40% 35% +100 optimistic % 36% 15 29% 10 30% 25% 20% 15% 10% 5% 7% 9% 21% 22% 22% 14% 5% % Much less confident (-100) A litle less confident (-50) The same (0) A little more confident (50) Much more confident (100) pessimistic Mid term confidence is also down but appears more resilient than the short term outlook. Still one third who are confident in their mid-term prospects.
10 Mid-term sector confidence: the next 5 years +100 optimistic Arable Beef / Sheep Dairy Horticulture Mixed Pigs Poultry pessimistic -40 Mid-term confidence has also been hit across many sectors, but not as much as short term confidence and outlook for several sectors remains positive. An expectant horticulture sector? Or a sector overdue improvement in prices & profit?
11 Poultry Confidence eggs v meat +100 optimistic pessimistic The next 12 months The next 5 years Poultry - eggs (43) Poultry - meat (36) Eggs producers are markedly less confident for the coming 12 months compared to the last year (-28), but mid-term confidence is marginally optimistic (+5) In contrast, broiler producers are only very slightly pessimistic for the coming year overall (-6) and are much more buoyant for the mid term (+24)
12 Predicted Business Longevity 60% 50% % 46% 40% 30% 20% 10% 0% 23% 23% 19% 13% 12% 12% 4% 0% Under one year 1 to 5 years 6 to 10 years 11 to 20 years 21 years or more Predicted business longevity has remained static since last year Our members maintain a long term outlook, despite the short term challenges
13 Key Messages Confidence is critical for all businesses it s an early indicator of profitability (results for dairy last year) Influences investment and production intentions Weather has hit confidence in the short term, and tempered some of the optimism that farmers and growers had for the longer term Input prices and regulation/legislation remain critical issues for members Spring survey scheduled to check on confidence shifts
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