We all find ourselves in interesting times within the business community and more specifically within our agricultural industry. The phrases “lockdown” and “social distancing” are now commonplace in our vocabulary and indeed the way that we do business in the future will most definitely change. Our industry has diligently continued supplying our country with a much-needed resource, food. It was not long ago that MPs were standing up in Parliament and suggesting that farmers were no longer needed, how wrong they were, now they’re on the list of keyworkers!
What we hope is that our nation now has a new appreciation of our farming industry, food production, pricing, and in particular, enforcing the ethos of locally produced.
The resilience of our industry cannot be underestimated; however, we must understand the vulnerability of some business and in particular, the susceptibility of different sectors. A number of our diary clients are reaching breaking point having not been paid, in some cases, for 9 weeks of continued milk supply. We are working closely with these businesses in order to provide them with budgeting and cash flow forecasts in order to access further working capital from the banks, many of which are being incredibly supportive. The importance of being “bank ready” cannot be underestimated not only for changes that may be forced upon the business but for opportunities that may be available in the future.
We are seeing a number of opportunities arise within the industry for extra land under FBT or Contract Farming opportunities. We are making sure that our clients’ businesses are financially ready to be at the front of the queue in order to take on these opportunities.
Our industry is strong and resilient, however, in order for this to be the case farming businesses need to have a clear plan and strategy as to how their business will perform, its cash requirement, and in particular its exposure to risk. We are currently carrying out a series of business health and asset checks making sure that our clients are in a position to take advantage when “opportunity knocks”.
If you would like to discuss this article further or think your business would benefit from some independent advice, a ‘health check’, please contact Simon Britton on 07866 721146 or click here to send an email.