Richard Rankin CEO of the H&H Group contemplates what the future holds in store for the company and its customers
“Every business needs to keep abreast of what is going on in its market and this is particularly true in times of change and flux. Each year we have a series of company strategy meetings and decide where we believe we should focus our efforts to improve both our service and the bottom line. This year’s meetings will be particularly key, as we look at ways to help our customers in the agricultural sector cope with all the changes and challenges they are currently facing.
It is certainly not all bad news for farmers, as although they have seen significant rises in fuel, feed, and fertilizer costs, they have also seen record prices for crops such as wheat and rape seed. This is only likely to continue with the war in the Ukraine disrupting the global supply of such produce. However, it will be a hard balancing act for farmers to decide how best they can remain profitable - should they diversify or simply stop production of anything uneconomic altogether? Will supermarkets and other buyers pay farmers enough to keep them in business? There is a significant concern that smaller enterprises will be particularly badly hit, as they literally have less room to manoeuvre and perhaps less available cash to invest in new projects, and if so, then where can we help.
Over the last year our livestock sales have gone from strength to strength, seeing record prices across all cattle, sheep, and machinery sales. They say that necessity is the mother of invention, and this is certainly true in this case, as due to Covid, we held many more sales online, which enabled us to reach new customers from all over the UK. Embracing new technology is a key part of our strategy and we will be increasing our digital services offering out of H&H Reeds, creating a full service solution for any business’s marketing needs. We will also ensure that all our other businesses are keeping abreast of developments in the digital world.
We are keen to support our customers as they navigate their way through new government support schemes, and it will be interesting to see if the Lump Sum Exit Scheme has any impact on the number of farms changing hands. The land agency part of our business, H&H Land & Estates, has recently seen two farms reaching nearly 50% over their valuations, so despite the difficulties many farmers are experiencing, the demand for land continues unabated. One of the farms was bought in its entirety by a neighbouring farmer and I believe we will continue to see the trend of increasingly large agricultural enterprises becoming the norm, to capitalise on economies of scale.
It will be interesting to see if the demand for homegrown meat increases or decreases over the next year. There are two contradictory trends, currently we are finding that high quality lamb and beef are in great demand, but we are concerned that consumers won’t want, or be able to pay for it, as the prices inevitably rise with higher costs of production, particularly if the government continue to allow poor quality imports. Hopefully the increasing rate of inflation that the UK is currently experiencing will not last too long, although with so much uncertainty in the world, even the most experienced economists are finding the financial future hard to predict.
Whatever the next few years will bring, one thing we can be sure of is the need to invest in our own people and nurture the talents of the next generation. We have just taken on our second apprentice to train as a chartered surveyor and at the other end of the career ladder have recently appointed two new, non-executive directors, bringing fresh ideas and experience to the table. A company is only as good as the people within it, and we are keen to ensure that we keep at the cutting edge of what we do and bring in fresh new talent and ideas. We have excellent customer and staff loyalty in the H&H Group and that is a great foundation to build on. We will also be taking a good look at our infrastructure undertaking a series of improvements to ensure our premises are fit for purpose, modern and appealing. Like most successful businesses, we know that our customers and staff deserve the best and we will make sure they get it.
Going forward we will constantly be looking at the bigger picture, from world conflicts to government legislation, checking in with each other and keeping our finger on the pulse of the market. Time spent in reconnaissance is seldom wasted and with a very fluid and quickly changing environment it is even more vital to be prepared for any eventuality. I know that our farming customers will be doing the same and displaying their usual adaptability and entrepreneurial spirit. The going is tough, but farmers are tough and will get going - it might just be in rather a different physical and financial landscape."