Scottish Government

ISBN 0 7559 1279 9 (Web only publication)

This document is also available in pdf format (204k)

Contents

EXECUTIVE SUMMARY

1. AIM AND APPROACH

2. SURVEY RESULTS
2.1 THE SAMPLE
2.2 WHEAT RESULTS
Overall result
Regional results
Results by performance
2.3 BARLEY RESULTS
2.3.1 Winter Barley Results
Overall result
Regional results
Results by performance
2.3.2 Spring Barley Results
Overall result
Regional results
Results by performance

3. POINTS TO NOTE
a) 2004 a difficult harvest
b) The marginal economics of Scottish cereal growing
c) Limited management of price risk by growers
d) Evolving business structures
e) Treatment of contractors and casual labour
f) Relevance of standard costs and general overheads

4. OUTLOOK - IMPLICATIONS OF CAP REFORM
4.1 FORCES DRIVING CONTRACTION
Cost of production
Medium term outlook for grain prices
High oil price
Processor and supplier restructuring
4.2 FORCES LIMITING CONTRACTION
Rotational constraints
Fixed asset theory
The single farm payment
4.3 FARM LEVEL STRATEGIES
Cutting costs of production
Grow more profitable crops / varieties
Good risk management
Expansion / contraction
4.4 CONCLUSIONS - THE AGGREGATE IMPACT

Appendix 1: Outline of average cropping and land use on survey farms in 2004
Appendix 2: Average winter wheat margins by region in 2004 (weighted)
Appendix 3: Winter wheat regression analysis
Appendix 4: Winter wheat margins by performance in 2004 (unweighted)
Appendix 5: Average winter barley margins by region in 2004 (unweighted)
Appendix 6: Winter barley regression analysis
Appendix 7: Winter barley margins by performance in 2004 (unweighted)
Appendix 8: Average spring barley margins by region in 2004 (unweighted)
Appendix 9: Spring barley regression analysis
Appendix 10: Spring barley margins by performance in 2004 (unweighted)
Appendix 11: Conventions for Cost and Margin Calculations

This report has been prepared exclusively for the use of SEERAD and no responsibility can be accepted for actions taken by any third party arising from their interpretation of the information contained in this document. No other party may rely on the report and if he does, then he relies upon it at his own risk. No responsibility is accepted for any interpretation which may be made of the contents of the report.

Contact:

Kev Bevan
SAC
Auchincruive
Ayr
KA5 6HW
01292 525029
kev.bevan@sac.co.uk