Contact our offices
Main office
COLBURN
5 & 6 BAILEY COURT
COLBURN BUSINESS PARK
RICHMOND
NORTH YORKSHIRE
DL9 4QL
Estate Agency Offices are located in
BARNARD CASTLE, BOROUGHBRIDGE & RICHMOND
Residential Management Team
Our Offices
Many farmers will be feeling the impact of global events more keenly than ever with the current Iran conflict a timely reminder of how quickly the cost of fuel, fertiliser, feed and haulage can shift.
These are the essentials we all rely on and are increasingly tied to world energy, shipping and currency markets. In recent years we have had the pandemic, the ongoing war in Ukraine and rising tensions in the Middle East, each one moving markets faster than most farm budgets can adjust.
My main concern is that sudden change and volatility is becoming a normal part of running a farm. While we cannot control what is happening in the headlines, we can make sure our businesses are prepared, so unexpected cost rises don’t derail the business.
In the short term, conflict tends to hit energy markets first and if oil and gas prices rise, the effect soon filters through to everyday farm costs such as red diesel and haulage. Nitrogen fertiliser is especially exposed because of its close link to gas prices, so even if you are buying locally, prices can still move sharply.
Supply and transport costs can catch us out and we have seen that during the ongoing war in Ukraine with disruption to shipping routes and some essential products becoming difficult to secure at short notice.
The real squeeze comes when our costs rise immediately while the prices we receive for outputs do not move at the same pace. A weaker pound can add to the cost of imported inputs, while higher interest rates can make overdrafts and loans more expensive.
Because most fuel and fertiliser come from few sources any disruption can push prices up quickly. To deal with these pressures, farm businesses need to be flexible and that can mean changing what we buy, keeping a close eye on cashflow or adjusting how we sell our produce.
Livestock businesses feel price swings sooner than most because feed, fuel and energy costs hit straight away. Soya, maize and straights are priced on global markets, so any rise in shipping, energy or currency costs can push feed bills up almost overnight. Fertiliser affects grass and silage and higher diesel and electricity make fieldwork, slurry handling, ventilation, feeding and milk cooling more expensive. The real danger is facing higher feed costs while milk or meat prices stay the same or even fall.
To manage volatility, it is crucial to plan ahead by securing key feeds, keep rations flexible, protect forage stocks and reduce waste through good animal management.
Building resilience is never simple, but there are practical steps that can provide a useful starting point for staying prepared and protecting your business.
Know your numbers. Keep gross margins up to date and understand what a £10/t change in fertiliser or a 10p/l change in fuel does to it.
Secure supply early for the essentials. Don’t leave key inputs to the last minute, especially in tight seasons.
Improve input efficiency. Soil testing, nutrient plans and better application timing/rates can cut waste without gambling on yield.
Protect cashflow. Keep working capital headroom, stress-test the overdraft and speak to the bank early if costs jump.
Share risk where you can. Use a mix of selling options (spot/forward/pools) and consider fixed or formula pricing on major inputs if it suits your business.
The most resilient businesses are those with a clear plan in place, where buying is disciplined, inputs are used efficiently and there is enough cash available to weather sudden cost increases. That approach will not remove volatility but it can help prevent price shocks from turning into a crisis.