The rains caused economic pain in England

Wheat production will plummet while livestock producers are being hammered by the 
sky-high cost of 
imported feed

Reuters / Last year’s record rains will squeeze Britain’s farmers well into 2014 and force makers of bread and biofuels to buy more costly imports.

Production of wheat is set to fall to its lowest level in more than a decade this summer, forcing purchases of bread-quality grain from Europe and North America. Livestock farmers have also seen their incomes plunge after wet conditions forced them to purchase more feed at inflated prices following last year’s U.S. drought. The rains could also lower conception rates with fewer lambs and calves this spring.

“I’ve never worked in an environment where the weather has been as bad, so we are in uncharted territory. This is going to impact cash flow in 2013-14 in both sectors (livestock and crops),” said Allan Wilkinson, head of agriculture at banker HSBC UK.

Sodden soil last autumn cut the winter wheat area in England and Wales by 25 per cent and hurt what was planted.

“When you drive around the countryside now, clearly the arable part of the U.K. looks in a patchy and fairly poor state compared with how it would normally look at this time of year,” Wilkinson said.

Rain has also made it harder for livestock to feed on grass, increasing the reliance on purchased feed at a time when its cost has soared following last year’s U.S. drought.

“Weather-impacted output coupled with increased input costs have hit farming over the last year. Livestock producers are among the hardest hit,” National Farmers Union economist Anand Dossa said.

Hog farmers saw their incomes halved in the past year, and producers of milk, beef and lamb suffered drops of 40 per cent or more.

“Over the long term, most farms have a strong balance sheet, but just at the moment the cash position is really quite a squeeze,” said economist Graham Redman.

“There will be casualties.”

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