Farm supplier market trends

A yellow forklift moving hay bales on a sunny day  (last updated July 2019)

What has been happening in the farm supply sector

The performance of the farm supply sector is closely linked to the fortunes of the farming sector as a whole. In recent years the agriculture sector has come to be defined by significant fluctuations in producer prices from one year to the next, making it very difficult for the farmer to successfully plan ahead. Farmers have also seen their profits come under increasing pressure as input costs have risen and many now look to cut costs wherever they can to improve their profit margins, including by shopping around to find the best possible prices. As a result, many independent farm supply businesses have lost ground to larger competitors whose economies of scale enable them to price very competitively.

Changes in farming methods over a period of time have led to a reduction in demand for agrochemicals, fertilisers and other products. This has meant that competition within the farm supply sector has increased and prices have been forced down.

The EU is committed to reducing pesticides that harm the environment or human health and this has affected the types of pesticides that can be sold. The use of three key neonicotinoid insecticides on fields has been banned in an attempt to reverse the decline in honeybee and other pollinator numbers. These insecticides can now only be used in enclosed spaces, like greenhouses. It is not known whether the ban will continue once the UK has left the EU.

'Traceability' has become an important feature of all agriculture sectors and many farmers are now members of farm assurance schemes. The farm supply sector has been involved with some of these schemes, for example, UFAS. UFAS (Universal Feed Assurance Scheme) complements the British Farm Standard which is the umbrella organisation for the various farm assurance schemes in Britain. Other trade assurance schemes include:

  • Trade Assurance Scheme for Combinable Crops (TASCC)
  • Feed Materials Assurance Scheme (FEMAS)
  • Fertiliser Industry Assurance Scheme (FIAS)

As with many other business sectors, there are now very many online farm suppliers. Some of these are online-only and others are the online arm of traditionally premises-based suppliers. (National chains such as Countrywide have an internet presence, as do many independents.)

The decoupling of farm subsidy payments from production following the introduction of the Single Payment Scheme (SPS) from the beginning of 2005 has had an impact on the farming sector. In the past a farmer might have carried on farming a commodity that wouldn't have been profitable without a direct subsidy. After the SPS was introduced, many farmers significantly changed the nature of their businesses, with increased diversification into non-farming enterprises. The SPS was superseded by the Basic Payment System from the start of 2015. The new system includes an 'active farmer' test as well as a greater focus on environmental measures but otherwise retains many of the features of the SPS. The UK's withdrawal from the EU is likely to have a significant impact on the agriculture sector and the businesses that supply it once the exit process has been fully completed.

In October 2005, the sale of animal medicines changed following the implementation of new veterinary medicines legislation. This created four classes of animal medicines - POM-V; POM-VPS; NFA-VPS and AVM-GSL. Farm suppliers cannot sell POM-V medicines (unless they employ a qualified vet or pharmacist and complete the necessary premises registration) but can prescribe (without a clinical assessment) and sell POM-VPS sell NFA-VPS (these don't require a prescription) as long as the person responsible for making these sales is a Suitably Qualified Person (SQP). There are no restrictions on the sale of AVM-GSL medicines. There are comprehensive details about becoming an SQP on the Animal Medicines Training Regulatory Authority (AMTRA) website. The regulations also allowed for the supply of POM-V medicines to be made by the prescribing vet and well as by another vet or pharmacy. This has led to the creation of a number of online veterinary pharmacies, who typically offer discounted prices on their animal medicines.

The rules governing the use of pesticides mean that all users require a certificate of competence. Suppliers will have to make sure that staff holding specified certificates (from BASIS) are available at the time a sale of pesticides is made so that they can give information on correct use, health and safety and environmental risks.

Keep up to date with developments

Joining a trade association is an excellent way of keeping up with developments in the industry. The main trade association for the farm supply sector is the Agricultural Industries Confederation (AIC). The AIC is the scheme manager for the UFAS, TASCC, FEMAS and FIAS assurance schemes and also publishes the quarterly AIC Journal. Their website has a great deal of information about current issues in the sector.

Farming related journals, such as Farmers Weekly, are useful sources of information to help you keep in touch with what is happening in the agricultural sector as a whole.

What does the * mean?

If a link has a * this means it is an affiliate link. To find out more, see our FAQs.