Jeanette Dennis, from Ashtons Legals, looks at the implications for farmers as war wages in Ukraine

Farmers plan their crops months in advance, buying fertiliser, seed and sprays throughout the year when prices are competitive.

The lack of wheat normally produced in Russia and Ukraine could have a massive impact on world supply and prices for the UK.

Ukraine produces 17.5 per cent of the world’s supply of maize so we are highly likely to see an increase in world prices. This is potentially good news for UK farmers, but it is not just about predicted sales prices – costly inputs impact on profits and rising oil prices mean the already high 2021 fertiliser prices are likely to climb further as well as diesel and the hike of 54 per cent in electricity and gas.

Farm economist Mark Beresford-Smith of HSBC suggested recently that we are possibly ina position reminiscent of 1973 with the OPEC crisis and the Yom Kippur War. This resulted in the 1975 rise in inflation to 25 per cent due to the quadrupling oil prices.

There is, however, opportunity for the agricultural sector, as change driven by necessity is embraced by farming families in their succession planning, coupled with recognition in local communities of farmers not just being food producers, but also as custodians of wildlife and wellbeing.

Non farming ventures will need to be considered carefully by farming families – some older members may not have the stomach to abandon food production in the short term due to price rises, but the younger generation may want to borrow on fixed low interest rates to invest in energy production and environmental projects which in the medium to long term produce greater returns.

Careful professional advice will be needed, and no ‘one size fits all’ will work here in East Anglia – each farming family and farm is different.

-- Jeanette Dennis

jeanette.dennis@ashtonslegal.co.uk