Positive outlook among Europe’s investment-ready farmers

Farmers in Germany, the UK and Poland are planning to increase investments while in France, the mood is more cautious. This was the scenario presented by the latest Trendmonitor Europe for spring 2014, published by DLG (German Agricultural Society).

German farmers are satisfied with the current business situation and many are optimistic about developments over the next 12 months. “German farmers’ willingness to invest is higher by 6% from autumn 2013 to 58% based on the latest results, which is almost at the level of the spring survey in the boom year of 2008,” says Dr Achim Schaffner, head of the DLG economics department, who presented the results at a DLG event in Denmark. He reckons this mood in Germany is due to the higher prices for grain and oilseeds and lower feed prices since autumn 2013, while access to favourable bank loan rates have helped stimulate investments in farm development.

Unlike those of previous years, the results of the latest survey show marked national differences in business confidence within the agricultural sector. Polish farmers also reported continued optimism, sharing the generally positive sentiment across Europe. Among Polish farmers, 55% reported a willingness to invest according to the latest survey results. The Poles also continued to expect a stable business climate, thanks to positive developments in both the dairy and pig sectors. Just as across the border in Germany, the survey found investment activity remaining high in Poland.

French farmers assessed their business situation as stable but were less optimistic about their business future compared to the autumn 2013 survey. Many expressed apprehension over possible economic disincentives arising from the implementation of the EU Water Framework Directive and the reform of direct payments. Livestock producers also view challenges in the year ahead. Willingness to invest decreased by 4% in the latest survey, taking the total to 24%.. French farmers want to expand existing production also as to invest in new farming branches.

In the UK, farmers are more confident with actuals business situation and with business expectations of the next 12 month due to the recovery of business results in 2013 after the sharp decrease in 2012.

In the UK, farmers are planning 47% of investments in field equipment – up 4% from the autumn 2013 survey. Farm building enterprises stand to command 42% of all planned investments, similar to results in the autumn survey in 2012. Approximately 11 % of investments will go into bioenergy (4% down on the last survey).

The DLG Trendmonitor Europe sounds out farming sentiments each spring and autumn with results produced in cooperation with the Kleffmann Group, a market research company. A total of 2,350 farmers from Germany, France, the UK and Poland were surveyed in the latest Trendmonitor.