So the UK has decided to leave Europe. What implications has it for your business? Firstly, nothing in terms of subsidy payments will change for two years. Then you can expect lower levels of subsidy in the longer term, though the UK has committed to still supporting agriculture.

The bigger variable in the short term will be exchange rate volatility. With a fall in the value of sterling resulting in dearer imports and cheaper exports. This will mean higher feed and fertiliser prices and higher priced food imports making UK agricultural output more competitive.

Migrant labour may become more difficult to source thus resulting in higher labour costs. As a net importer the UK inflation rate could increase as we import higher priced products and services. This could mean higher interest rates earlier than expected which would put pressure on a more highly geared agriculture industry than it was 10 years ago.

Higher interest rates will also counter the lower exchange pressure mentioned at the beginning of the article. What is being highlighted is a number of different variables all changing at once, some in isolation, some interconnected.

You cannot control these variables and their effects on your business. You still need to be aware though and controlling what is inside your farm gate is more crucial than ever. There will be opportunities among the rapid changes and volatility that will ensue. If agricultural prices get a 10% boost due to a 10% depreciation of sterling more farmers will exit dairying, for example, as their livestock will be worth more to sell. Is your business in a position to take advantage? It doesn’t mean you are buying extra cows. It could mean cheaper land to rent closer to your farm.

Have you got your last set of tax accounts completed yet or have you looked in depth at your yearend management accounts? Give us a call today to see where we can help to improve your business prospects and ensure you can take advantages of the opportunities that lie ahead and not fall foul of the potential threats.

Contact Gerard at gerardfinnan@fcgagric.com or your local FCG office to discuss Brexit implications for your business.