Rain in U.K. Said by Union to Cost Farmers $2.1 Billion in 2012

Excess rainfall that cut crop yields across the U.K. and rising feed prices cost farmers about 1.3 billion pounds ($2.1 billion) in 2012, the National Farmers Union said.

June to August was the rainiest in the U.K. in a century, while England, the country’s biggest wheat-growing area, capped its wettest year on record in 2012, according to the Met Office, the national weather forecaster. The U.K., the European Union’s third-largest wheat grower, harvested 13.26 million metric tons of the grain in 2012, down 13 percent from 2011, the Department for Environment, Food and Rural Affairs says.

“The appalling weather of 2012 has led to a financial black hole on Britain’s farms,” NFU President Peter Kendall said in a statement today. “As we enter 2013, many farmers are in areas under water or facing a double-whammy of huge feed bills for their livestock.”

Feed-wheat futures for May delivery surged 36 percent in 2012 on NYSE Liffe in London as rain cut British yields and droughts in the U.S. and Russia curbed global grain supplies. The contract touched an all-time high at 230 pounds on Nov. 28.

Total U.K. farm income was 5.57 billion pounds in 2011, up 24 percent from a year earlier, according to Defra, which hasn’t released figures for 2012.

“Farm incomes in the U.K., taken at the aggregate level, are going to be down year on year, reflecting in part the higher costs we’ve incurred and higher feed bills,” NFU Chief Economist Phil Bicknell said in a telephone interview yesterday from Stoneleigh, England. Declining crop yields because of wet weather reduced national income by about 700 million pounds, while rising input costs, including for feed, trimmed 600 million pounds from farmers’ bottom lines, he said.

EU policy makers should work to ensure farmer payments are distributed more evenly among countries in the bloc as they discuss potential budget cuts and reforms to support programs under the Common Agricultural Policy, the NFU said.

“We have urged the U.K. government to help to make current, distorted markets work properly and to ensure our farmers are treated fairly,” Kendall said in the statement. “In years like 2012, it is very clear to see that the support farming receives from the CAP is an absolute lifeline to many farmers. If there is to be a reduction in these payments, it should take place evenly across Europe’s single market.”

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