The weakness of sterling is fostering an optimism among British farmers denied to their Irish peers, the owner of the Masstock and Dalgety agribusinesses has said, as official data showed a rise in UK arable sowings.
Irish farmers, suffering "continuing pressures on incomes", are still holding back on fertilizer purchases and considering steep cuts to sowings, Origin Enterprises said.
"Spring cereal production continues to remain under pressure with an expectation of a 10-15% reduction in plantings over the full year," the Irish-based group said.
However, across the Irish Sea, UK farmers were enjoying a "more positive income situation", after the weakness of sterling boosted the value of their subsidies from Brussels, which are set in euros.
Single farm payments in the UK have risen by an estimated 14% in sterling terms, being set at an exchange rate of nearly �0.91 to the euro, compared with �0.79 in 2008 and less than �0.70 in 2007.
"More certainty has returned to [UK] fertilizer pricing, with increasing purchasing activity currently taking place," the company said.
Increased winter crop acreages provided a "positive platform" for the group's Masstock agronomy business.
Plantings rise
The comments came as UK official statistics showed that the dynamics of English winter plantings, including a record rapeseed area, reported last week had been reflected throughout the UK.
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UK winter plantings for 2010 harvest (year-on-year change)
Wheat: 1.944m hectares (+11.4%)
Oilseed rape: 628,000 hectares (+9.8%)
Barley: 410,000 hectares (-3.3%)
Oats: 94,000 hectares (+1.9%)
Field beans: 88,000 hectares (+1.2%)
Source: Defra |
"All� crop areas, with the exception of winter barley, saw increases as a result of the good weather," farm ministry statistics showed.
UK winter wheat sowings rose by 11.4% to 1.9m hectares, with rapeseed plantings rising by 9.8% to 628,000 hectares.
The winter barley area fell by 3.3% to 410,000 hectares, "influenced by low barley prices and poor market conditions", a trend being reflected throughout Europe.
Seasonal cycle
Origin Enterprises, which also owns Continental Farmers, a 16,000-hectare arable venture in Poland and Ukraine, and John Thompson & Son, the Irish feed miller, reported earnings down 28% at E10.2m for the August-to-January half.
Revenues fell 15.9% to E596.8m.
The group had suffered a "difficult trading environment", Tom O'Mahony, chief executive, said, also noting "increased seasonality" in the farm businesses.
Farm activity was becoming increasingly concentrated on the latter months of the growing season, with customers adopting a "cautious approach and deferring buying decisions until closer to the main application periods".
Origin Enterprises shares closed 1.8% lower at E2.20 in Dublin.
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