Farming News Review - April 2007

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Policy issues CAP (etc.) support details/payments Grants Farm finance Product prices

Other crop news Other livestock news Inputs Marketing Miscellaneous

Policy issues

The House of Commons’ Efra Committee, in its report on “the RPA and its implementation of the SP”, have strongly criticised Defra for overloading the RPA with too much and with too short a deadline. The report then goes on to “seriously question” the use of more than £500,000 of public money to fund a private review of the SPS and requests a published explanation for its commission. The Committee concludes that the “sorry saga” has cost British farmers £20 million and that whilst Johnston McNiell, as the Chief Executive of the RPA, was partially accountable, it could not understand why the price for failure has not been paid by, the now Foreign Secretary, Margaret Beckett or Sir Brian Bender the Parliamentary Secretary.

CAP (etc.) support details/payments

Overpayments of the 2005 Single Payment, amounting to £5 million, are yet to be recovered by the RPA several months after they were discovered.
The RPA have announced that, as at the end of March, approximately 88.5 per cent of 2006 SP claimants had received full or part payments, more than two-thirds of those claimants getting the full payment. Amounts paid out represent almost 70 per cent of the total monies due to farmers.
Defra Secretary, David Miliband, has announced that the budget of the Rural Development Plan for England for the period 2007 to 2013 has been agreed at £3.9 billion, more than double that of the previous 7-year period. 85 per cent of the funds will support agri-environmental and other land management schemes, whilst the remainder will go towards improving sustainability and competitiveness in agriculture and forestry.
To fund the Rural Development Plan budget, voluntary modulation for the UK has been set at 12% for 2007, 13% for 2008 and 14% for the remaining years to 2012. Voluntary modulation for most other EU member states remains at zero.
Hill Farm Allowance (HFA) payments have begun this month, with the target of making partial payments to 40% of the claimants by early April. European legislation requires 30% of each farm’s payment to be withheld until the English compliance inspection programme is fully completed. Remaining claimants will receive their part-payments once their 2007 SPS form has been validated and HFA admin checks have been carried out.
The RPA have confirmed that all 2007 SPS forms have been dispatched to English farmers.
The deadline for registering the transfer of SPS entitlements for the 2007 scheme year, 2 April 2007, has now passed. However, the latest ‘start date’ for the 10 month occupation period is 30 April 2007, so time remains to ensure that land occupation is correctly structured for the 2007 claim.

Grants/regulations/legislation/environment

Honeybee populations across Europe and the USA are reported to be dropping, with entire colonies being wiped out, and the cause is yet to be ascertained. If losses continue there could be marked effect on pollination, affecting not only most areas of agriculture and horticulture but also British wildlife in general.
The government has announced its intended approach to tackling climate change in the draft Climate Change Bill. The draft bill sets out clear guidelines for the UK to cut Carbon Dioxide emissions by rates far higher than those set by the Kyoto agreement. The target, to cut CO2 emissions by a minimum of 26 per cent by 2020, will become legally binding if the bill is approved, along with the requirement to produce 5 year “Carbon Budgets” at least 15 years in advance? The Bill is now undergoing public consultation.

Other matters of farm finance and tenure

The government has introduced “Tenancy Deposit Protection” (TDP). Any individual or business letting property in England and Wales under Assured Shorthold Tenancies is required to protect the deposits they take throughout the period of occupation. This affects only ASTs that start, or are renewed, after 6 April 2007.
‘Agriculture in the UK 2006’, the 19th annual report produced by Defra, has quantified the improvement seen in farming during 2006, stating that total income from farming was up 6.9 per cent in real terms and the average net farm income was up almost 20 per cent on 2005. Contribution to the UK economy was £5.6 billion. The report records farmed land at 19 million hectares (77 per cent of the total UK land area) of which 7.5 million hectares were managed under agri-environmental schemes.
The Bank of England's Monetary Policy Committee has voted, eight members against one, to maintain the official Bank Rate at the level set in January of 5.25 per cent.
Research carried out by Oxford Brookes University in conjunction with the Royal Institute of Chartered Surveyors (RICS), has concluded that the negative effect on house prices of having a wind farm within a mile is not as marked as initially predicted. Whilst terraced and semi-detached houses have shown reductions in market value, albeit smaller than expected, larger detached houses have shown little sign of devaluation or no sign at all.

Product prices

A. Crops

The results of Defra’s December survey of sown over-winter crops published this month have put English plantings of wheat and oilseed rape up 5 per cent and 18 per cent respectively; both above previous expectations. This had a stalling effect on cereal prices in the early part of the month. The budget’s support of biofuels, combined with news of potential drought in Southern Europe gave the wheat market a little more strength near the end of the month. Average prices in late March (£/tonne ex-farm): feed wheat 93, milling wheat 99; feed barley 90; oilseed rape 162; feed peas and beans 93.
Potato prices rose further, albeit more steadily, in the first half of the month following the price jump seen in late February. The market weakened marginally mid-month but bounced back with more strength in the latter stages. Average prices in late March were £159/tonne, £10 up on the February closing price; £45 above prices in March 2006. Overall trade remains good and demand appears to be strengthening as packers and processors up their rate of calling in contracts. At the end of the month King Edwards were achieving between £180 and £200/tonne; up to £225/ tonne for top quality. Prices for Desiree were highly variable, obtaining prices of £150 for average samples up to £260/tonne for top quality. Top grade Maris Piper samples are still achieving £250 to £300/tonne, whilst samples of Estima are now only achieving between £180 and £200/tonne; high baker content samples are still commanding up to £230/tonne.

B. Livestock

The average steer price dropped back to 110p/kg lw at the start of the month but then proceeded over the course of the remainder of the month to gain back much of the loss to end the month just below 113p/kg lw. The price at the end of March 2006 was 105p/kg lw.
Lamb prices, in line with expected seasonal price trends, gained over 12p/kg lw in the early part of the month, peaking at 120p/kg lw. The latter stages saw prices drop back slightly, closing just below 120p/kg lw.
The average pig price showed signs this month of recovery from the steady declines seen since the start of the year. Opening at 104p/kg dw and closing at 105.5p/kg dw, the pig market is thought to be benefiting from the decline in demand for poultry meat as a result of the bird-flu outbreak.
Average milk prices continued to follow the seasonal pattern by dropping back further to just above 18 ppl. Present milk quota trading is showing signs that the market is recovering marginally with clean, 4 per cent butterfat holdings changing hands at 1.60 ppl, an increase of 0.3 ppl.

Other crop news

Sclerotinia germination in Oilseed Rape crops has started early according to BASF and ADAS in their joint sclerotinia monitoring service. The general risk at present is low, but expect more activity as the average soil temperature rises.
The British Potato Council’s “fight against blight” campaign has, through research undertaken over the 2006 growing year, underpinned the current strategies for combating the disease; increasing grower awareness and improving grower knowledge of best practices of control. It is hoped that this can be built on in the 2007 growing season.
HGCA has updated its online wheat disease management guide and now includes links to useful websites and publications.
Drilling of spring crops in Russia and Ukraine is well under way, earlier than expected as a result of milder temperatures in March.
The New Covent Garden market tenants’ association, in conjunction with Nicholas Saphir, has presented plans to the Covent Garden Marketing Authority proposing to redevelop the market to enable it to supply London into the next century.
Defra has announced that the EC minimum tolerance for common scab in potatoes is to be applied to all pre-basic, basic and certified seed in England and Wales.
Scientists from the University of California have published results claiming that Kiwi fruit grown organically had higher levels of both Vitamin C and polyphenols (proven to reduce cholesterol) than their conventionally grown counterparts.

Other livestock news

Defra has announced the lifting of the remaining restrictions imposed over large parts of Norfolk and Suffolk since the H5N1 bird flu outbreak in Holton. Investigations into the source of the virus and how Defra can learn from the outbreak are still continuing.
Regulations governing pre-movement bovine TB testing on cattle have been extended to include all cattle over 42 days of age.
The State Veterinary Service is to be combined with the Dairy Hygiene Inspectorate, the Egg Marketing Inspectorate and the Wildlife Licensing and Registration Service. The new entity, operational from 1 April 2007 will be called “Animal Health”.
The strain of Bluetongue (BTV8) that is rife throughout Germany, the Netherlands and Belgium, will pose a “real threat” to UK livestock farmers this summer, warned Defra’s chief Vet Debby Reynolds. Defra’s intended approach, should outbreak occur in the UK, will see the culling of any “test positive” imported animals (with no compensation), but no forced culling of UK animals infected on-farm. Farmers will effectively have to suffer the costs of treatment and inoculation. Several livestock associations, including the NFU are pressing for a more aggressive culling and compensation policy.
Stuart Roberts has been named as successor to Robert Forster as chief executive of the National Beef Association. Roberts, a Nuffield scholar who is currently involved in livestock policy development in Defra, will take over the role in July when Forster retires.
Defra’s chief Vet Debby Reynolds, in a letter to the Veterinary Record countersigned by the chief vets for Scotland and Wales, has strongly hinted that the routine biennial blood testing of beef animals for brucellosis is likely to cease this April.
Freedom Food, the RSPCA’s accreditation body, has been forced to retract a press release after the NFU called into question their claim that “65% of consumers were not confident in the living conditions of farm animals”.
Defra has enforced the cull of 567 dairy cattle from a Cheshire farm after the courts decided not to issue a third injunction to prevent the slaughter. Defra commenced action against the farmer last year after major discrepancies between the herd’s ear tags and passports were reported.
Scottish meet processor, Scotbeef, has opened a £17 million processing plant near Glasgow which will cut, pack and store beef for distribution within the UK and Europe.
The Moredon Research Institute has commenced a survey investigating the causes and effects of Enzootic Abortion in Ewes. They are seeking participants across the UK.

Inputs/Supply businesses

The Pesticides Safety Directorate has ruled that the use of herbicides containing the active ingredient Isoproturon (IPU) will not be permitted after 30 June 2009. Restrictions to application rates have been implemented with immediate effect.
The EU has removed trifluralin from the approved list of herbicide active ingredients available to farmers. No phase-out dates have been provided, but a minimum of 18 months is assured.
Despite recent increased demand for nitrogen fertilizer, and the associated price jump, prices in the UK are still low in comparison to the world market. Ammonium Nitrate is expected to be changing hands for £160/tonne in April, whilst the Urea price for April is expected to stand at £220/tonne.

Marketing

KG Fruits Limited, Alconeras and Driscolls have pooled their research and marketing operations into a new company, Berry Gardens BV, with the intention of dominating the European fresh berry market.
Lincolnshire farming cooperative, Friendly Farmer, has announced a plan to take over the remaining Little Chef sites in the UK. They are now looking for farmers who wish to join them and make the plan a reality.
Marks and Spencer have announced that they will label all food that has been imported by air with a new “air freighted” label to address their consumers’ desire to know more about the method by which the food reaches their shelves.
The 14th Lewis Award, the Worshipful Company of Fruiterers award for services to marketing in the fruit industry, was awarded to John McCliskie of New Zealand, for his dedication to the New Zealand fruit industry as both a producer and a spokesman.

Miscellaneous

The Farm Business and Advice Service (FBAS) ceased to exist on 31 March 2007. The role of providing business advice to farmers has been passed to the Regional Development Agency run “Business Link” network.
The Moulton Bulb Company Limited, one of the UK’s biggest onion handlers, has opened its fully refurbished onion-processing factory in Moulton, Lincolnshire.
Bayer Ag has reported sales up 17 per cent to just below €29 billion. Earnings before interest, taxes, depreciation, amortisation and special items (EBITDA) were up 14 per cent to just below €3.5 billion. The Cropscience sector, despite the shrinking market, still reported sales of €5.7 billion (down 3 per cent) and an EBITDA of just above €1.2 billion (down 5 per cent).
Herefordshire Council, following on from the much publicised court ruling against the Hall Hunter Partnership last year, has officially ruled that all polytunnels, including those already standing, will require planning permission. The NFU’s legal team is looking to take action against the council in support of its members who will be caught by this retrospective policy change.
The appointments of the existing chairman and commissioners of the Meat and Livestock Commission (MLC) have been extended to 31 March 2008, when the new Levy board structure takes over. Peter Barr CBE continues in the role of Chairman.
Cranberry Foods has announced plans to downscale its turkey processing and packing plant in Abergavenny as part of full review of its business operations.
Morrisons have announced pre-tax profits for the year ended 4 February 2007 of £331 million, an improvement of more than 500 per cent. On the back of these results, a rebranding exercise has been announced, including a new logo for the chain.
Dairy Crest has stated that any price increases it receives from supplying milk to Morrisons and Sainsbury’s will be passed back to its producers.
Cheese maker Dansco, well known for its mozzarella, has been rescued from administration by Canadian dairy processor Saputo.
Following the resignation of a number of key individuals from the Royal Agricultural Society of England (RASE), raising doubts over the viability of this year’s Royal Show, Peter Stovold, a Surrey Farmer, has been appointed to the new post of executive show director. Stovold will manage the 2007 show team.
Landrover have released their latest version of the Defender. The new model, although only distinguishable from the previous TD5 by a slightly bulged bonnet and some very minor tweaks, has a much improved, but still rugged, interior with new seats and ventilation equipment and a new high-torque 2.4 litre turbo-diesel mated to a 6-speed gearbox. The farm workhorse lives on!