Falling farmgate prices and market price volatility have contributed to a drop in farmer confidence, a new survey by the NFU has revealed.

image expired

After the last two survey results revealed a largely positive outlook within agriculture, the latest results show a marked dip in short term confidence among farmers and growers.

Responding to the union's fifth annual confidence survey, participants said that they expect negative impacts on their businesses in the coming year relating to regulation and legislation (77%); CAP reform (59%); output prices (56%) and input prices (52%).

The survey also showed that the proportion of farmers predicting that 'output prices' would negatively affect them over the next 12 months has more than doubled in the last year (from 27% in 2013, to 56% in 2014).

NFU President Meurig Raymond commented, "This year has seen farmgate prices falling across various commodity sectors – arable, dairy, livestock and mixed - and this increased volatility has clearly impacted on our members' confidence.

"At the time we spoke to our members, wheat prices were down 30 per cent year-on-year. Similarly, global dairy prices were down 45 per cent, all the while during a backdrop of sweeping cuts to the price of milk in this country. In beef, prices fell to three-year lows earlier this summer while potato prices are 24 per cent lower than they were this time last year. With the extent of those price shifts, it's not surprising that less than one in ten NFU members anticipate improvements in profitability."

Raymond said the "highly volatile marketplace" means lower confidence and reduced incentive to invest on farm should send "Clear signals that we as an industry must be given all the support we can to be more resilient during uncertain times."

Though the picture is bleak in the short term, the NFU president added that the union's research "Does show that, on the whole, farmers remain relatively optimistic about their long-term prospects." He added, "With an election less than six months away, the NFU and our members have a tremendous opportunity to outline these challenges to policymakers."