Is BPS advance payment a smokescreen?

The news at the end of last week in a letter from George Eustice announcing that 50% of our BPS claims will be paid at the end of July is very welcome from a cash flow viewpoint but is it a smokescreen hiding the deeper-seated problems we are facing?

For a change, we had a very kind winter and I don’t think I have seen for a long time, our countryside look so well with winter barley starting to shoot in the second week in May.

Prospects look good for harvest and the futures market for cereals at least, is at an all time high with wheat hovering above £300 a tonne, running right through to the 2023 harvest.

But any euphoria this may create is rapidly tempered by the total unpredictability of our costs.

The ghastly war in Ukraine looks like dragging on and as long as it does our supply chain is going to be affected.

Some 35% of our phosphate comes from Belarus as does a lot of potash from Russia, all of which will have to be replaced.

I know every farmer has been looking at fertiliser inputs with a view to making cuts wherever possible, but in the end if we are going to continue producing high yields, we will have to buy fertiliser; and the question to answer is when should we do this.

My crystal ball is somewhat cloudy but the market has retreated from the exorbitant levels of February and March.

At the time of writing, prices for full loads are approximately as follows:-

Nitram                                                  £790/tonne

Lithan/Pulan                                       £740/tonne

Pluriate of Potash                            £650/tonne

Triple Super Phosphate                £750/tonne

I offer the above as a guide only but on the evidence, I would be looking towards spending some of my BPS payment to put bags in the shed.

 

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