As drought and prolonged heat have reduced harvests across much of England, many farmers face increasing pressure on revenues and cashflow. The impact will vary between regions and individual businesses, but Virgin Money Head of Agriculture Brian Richardson says farmers should assess their financial position now and plan for the months ahead.

The situation is not universal across the UK, says Brian. Scotland and parts of the north of England have generally fared better than southern England, but there is no doubt that many farming businesses are facing another serious challenge.

"The impact has varied across the UK, says Brian. Although Scotland and parts of northern England have experienced some rainfall and generally lower temperatures than southern England, conditions have remained unusually dry in many areas. There is no doubt that farming businesses across the country are facing another serious challenge."

"Lower cereal prices across the last two seasons, combined with increased fuel and fertiliser costs, have already put enormous pressure on the arable sector. This summer's conditions have also created problems with forage availability for some livestock farmers."

Although newspaper headlines highlight the immediate effects of the drought, the full financial impact of this summer's poor harvest may take time to appear in farm cashflows.

"That is why it is important to identify any likely gaps in your cashflow now and plan accordingly. Tough times like these highlight the benefit of good financial recording and budgeting, and the value of ensuring that a robust cashflow forecast forms part of that overview. This allows everyone involved in the business to understand what may be coming down the line.

"Using this information to sit down with your advisers and bank manager is key. It will pay dividends to do that sooner rather than later, so that you can agree a plan for future cash requirements and support wider planning on the farm."

While individual businesses must plan for their own circumstances, the consequences of the drought also raise wider questions about the future of domestic food production. The poor harvest has prompted the new Prime Minister to emphasise the importance of food security, and Brian believes this recognition now needs to be supported by practical measures.

"I hope this renewed focus feeds through into policies and prices that allow farmers to achieve realistic returns. They need the confidence to invest and sow the crops that will be essential to maintaining our food supply next year and into the future."

Against this challenging background, access to specialist advice and support will also be important. The agricultural sector is supported by banking teams that understand its uniquely long-term and often cyclical nature. Every farm and its circumstances will be different, making an individual approach essential.

Virgin Money's agricultural team uses its experience and understanding of the sector to work with farming customers affected by the drought and its impact on their plans and cashflow.

"The farming sector has worked its way through many challenges in the past and will do so again. However, understanding your business and having accurate figures available will be more important than ever when planning a successful route through the current situation and into the future.

"At Virgin Money, we have focused on building a specialist agricultural team with extensive knowledge and experience. Crucially, its members are accessible to our farming customers when they are needed."