Farming News Review - August 2007

<< back

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

Other crop news Other livestock news Inputs Marketing Miscellaneous

Policy issues

In a response to the cereals supply shortage, the European Commission has proposed that compulsory set-aside should be set at zero for 2007/08.
The European Parliament is considering proposals which would reduce by at least 50 per cent the number of pesticide applications on EU farms by 2020. Under the Sustainable Use Directive each member state would be required to draw up a National Action Plan which would contain targets to reduce the overall use of pesticide.

CAP (etc.) support details/payments

The Rural Payments Agency has reported that 1,679 holdings failed to meet one or more cross-compliance conditions in 2006, 9 per cent down on 2005. The main reason for failure continued to be falling foul of the cattle identification and tracing requirements.
Defra has announced that Single Farm Payments made after the 30 June deadline will carry interest. By the due date 98 per cent of payments in England had been made, exceeding the target of 96.14 per cent.
Defra’s response to the report by the Environment, Food and Rural Affairs Committee on the Rural Payments Agency and the implementation of the Single Payment Scheme has been to deflect criticism on to the RPA and its former head, Johnston McNeill. The report concluded that Defra Ministers and officials should be held to account.

Grants/regulations/legislation/environment

The Environment, Food and Rural Affairs Committee has decided to launch an enquiry into the Government’s Waste Strategy for England which was published in May by Defra. The Committee is seeking to determine if more should be done to promote anaerobic digestion in farming.
A nine year study by the US Agricultural Research Service has concluded that organic farming is a better soil builder than no-till.
New regulations announced by Defra, which come into force on 1 August, remove the restrictions on dealing in game birds and venison during the close season, and remove the requirement for a licence to kill or take game.
The Department for Communities and Local Government has advised all chief planning officers that local authorities should continue to assess the planning status of polytunnels on a case by case basis.

Other matters of farm finance and tenure

Employers leaders have expressed dismay over the confirmation that Agricultural Wages Board workers will be entitled to a 4.5 per cent wage increase from 1 October.
Recent research undertaken by Savills has indicated an 11.6 per cent increase in land values in the first 6 months of the year to an average of £3,000 per acre.
UPM Tilhill has reported an average woodland value some 7 per cent higher in 2006 compared to the previous year, 60 per cent higher than 2002.
Knight Frank’s Prime Country House Index has reported a 3 per cent growth in farmhouse values in the second quarter of this year with the average having reached £1.2 millions.
ADAS Wales has reported that two-thirds of farming businesses in Wales are unprofitable without the Single Farm Payment.
In 2006 returns on tenanted land outperformed residential property, shares and bonds at 17.6 per cent, almost double that of 2005.

Product prices

A. Crops

Reports of disappointing yields in USA and Eastern Europe, combined with the obvious effect of rains in the West of Europe (particularly in the UK) has seen the grain markets boom. The UK harvest is further delayed as the rain continues, raising concerns over potential quality for millers and maltsters. The milling premium has jumped to over £30/tonne in some instances. Eastern Europe, with a converse lack of water continues to reduce the predicted harvest totals as a result of the drought. Average prices in late July (£/tonne ex-farm): feed wheat 130, milling wheat 150; feed barley 113; oilseed rape 186; feed peas and beans 132.
Average potato prices made the annual adjustment to new crop this month; 2007 crop prices opened at £140/tonne, £10 lower than opening crop prices a year ago. The well-publicised rainfall and flooding in some areas, combined with the high risk of blight attack in others, is likely to result in an unpredictable market as the quality and yields for the 2007 crop become apparent. 2007 harvest is underway for early varieties, with wholecrop Maris Peer, Maris Bard and Wilja achieving between £110 and £180/tonne depending on skin-set. With 2007 maincrop harvest yet to start, trade for 2006 crop remains flat but steady for packing and processing, mainly consisting of contracted Estima. In late July, 2006 wholecrop were achieving between £70 to £160/tonne, whilst good samples of Estima are now priced between £140 and £200/tonne.

B. Livestock

The average steer price weakened marginally early on in July, dropping to a mid-month low of 111p/kg lw. Over the latter half of the month the price recovered, ending July just above 113p/kg lw, 2p/kg below the price at the same time in 2006.
UK lamb prices continued to weaken as more of the New Zealand product saturated the European market. Early on in the month the price fluctuated around 120p/kg lw but in the latter stages the price slumped, closing at just above 112p/kg lw, on a par with the prices seen a year earlier.
The average pig price, in line with the expected seasonal curve, held steady for the duration of the month. Prices remained at 110p/kg dw, 2p/kg above those at the same time in 2006.
The average milk prices in July dropped back marginally to close at 17.70 ppl. However, many dairies announced price increases from 1 August; Dairy Farmers of Britain, First Milk, Robert Wiseman Dairies and Dairy Crest have all announced price increases for liquid milk of between 0.5ppl and 0.71ppl. Milk quota prices built up slightly over the course of July as demand increased to match supply. Clean, 4% butterfat holdings were changing hands for as much as 2.00 ppl in late July, marginally above June’s prices.

Other crop news

Adverse weather conditions across the UK have wreaked havoc with a variety of crops. Lifting of rootcrops has been at a standstill; potatoes have either been rotting or suffering from blight; hail has devastated many top fruit orchards in Kent; pea yields are expected to plummet and early harvesting of winter barley and oilseed rape is suggesting lower yields.
The English apple crop was expected to be 20 per cent up on last year but estimates have been revised down to 5 per cent as a result of hail damage.
Asparagus sales have increased by 16 per cent in 2007.
The Government has agreed to lift the cross-compliance standard until 31 August to enable growers to gain access to waterlogged crops.
Sugar beet quota is to be cut by 10 per cent for the 2008/09 season with compensation expected to be about £30 per tonne.
The 2007 HGCA Planting Survey reports an increase in cereal plantings of 47,000 hectares over last year but an increase of 79,000 hectares in plantings of oilseed rape.
The European Commission is expected to grant a licence for the cultivation of GM potato Amflora, making it the first approved GM product for 10 years.
Fengrain, the East Anglian grain cooperative, has launched a three year feed wheat contract offering a minimum price of £100 per tonne and a maximum of £120 per tonne.
HGCA has funded a 40 month project to study the dormancy of black-grass, Italian ryegrass, barren and meadow brome. The project aims to provide an annual forecast of black-grass dormancy.
A 10-year study by researchers at California University comparing organic and conventional tomatoes has concluded that levels of quercetin and kaempferol, flavonoids which combat heart disease, strokes and cancer, were 79 and 97 per cent higher in organic produce.
HGCA has joined with the Scottish Executive and Scottish Enterprise to establish two arable monitor farms and six arable business groups to encourage information sharing and benchmarking practices across Scottish arable farms.

Other livestock news

Land not in agricultural production can now be used for grazing if the farm is badly affected by the wet conditions and it is necessary for animal health and welfare reasons. Grazing set aside with own animals or taking a hay or silage crop is now permitted.
The latest statistics published by Defra have revealed the number of cattle slaughtered with bovine TB in the first 5 months of 2007 was up by 21 per cent compared to the same period last year. In addition the instance of disease rose by 19 per cent indicating a continued spread into previously uninfected areas.
Dairy Crest has agreed to pay a number of Gloucestershire and Worcestershire producers for their milk even though it has been unable to make collections because of the flooding.
First Milk has announced a 0.5ppl increase with effect from 1 August, its fifth consecutive monthly increase while Dairy Crest has increased prices by 0.4ppl backdated to 1 July.
Improved conventional milk prices has led to a reduction in the number of dairy farms converting to organic. Only 8 million litres converted in the year to April 2007 compared with 15 million litres in the previous year.
The Scottish Dairy Cattle Association has reported a fall in dairy herds in Scotland of 27 in the first 6 months of the year although the average herd size has increased to 136.
Tesco has banned its dairy producers from exporting unwanted bull calves.
The Food Standards Agency has decided to “transform” meat inspection standards with the aim of controlling meat hygiene inspections on risk-based analysis, with tighter financial targets and a more efficient allocation of resources. Industry experts have welcomed the reform but are concerned about the cost burden.
A group of 33 vets has urged Defra to ignore the findings of the Independent Scientific Group on bovine TB claiming the Randomised Badger Culling Trials “failed to draw any useful conclusions.” The group claims the proposals put forward by the ISG are “unsafe, totally inadequate and misguided.”
Defra has launched a consultation on how the National Control Programme should be implemented to reduce salmonella in poultry laying flocks.
EU Food Safety Commissioner Markos Kyprianu has dismissed a report prepared by UK and Irish farmers on the safety of Brazilian beef as being incorrect and misleading and incomparable to the inspections undertaken by trained veterinary inspectors from the Food and Veterinary Office.
The Government has rejected the recommendation of the Farm Animal Welfare Council that loopholes which would allow GM or cloned animals or their embryos to enter UK commercial agriculture uncontrolled should be closed. It believes the likelihood of a breeding technique with detrimental consequences for animal welfare taking off in the UK is extremely low.
A Government report into anti-microbial resistance in humans and farmed animals has led to a dispute between the Soil Association and the NFU. The Soil Association has accused the Government of misleading the public about the excessive use of antibiotics on farms while the NFU accused the organic body of scaremongering.
A survey of pig farmers and specialist pig vets suggests many producers are failing to guard against porcine intestinal disease. The survey found that only 30 per cent of farmers believed ileitis was a problem on their farms even though previous research found that over 90 per cent of farms in Europe were infected.
The bluetongue virus has emerged in a flock of sheep near Antwerp, Belgium.
Waitrose is to phase out the use of farrowing crates from all its British and Danish pig farms.
A study conducted by international breeding consultant Peter Amer, the Meat and Livestock Commission and SAC has concluded that performance recording and a selective breeding programme could be worth as much as £7 millions each year to the English beef and lamb industries.
Genus ABS, Promar International and HTSPE have developed a new vaccination preparedness plan for foot and mouth on behalf of Defra.
The MDC report “Routes to Profitability 2”, commissioned by NFU Scotland, has concluded that the UK dairy industry is making good progress but must continue to improve innovation and efficiency through increased collaboration.
Wool prices have increased by 10p/kg compared with last year mainly due to low end of season stocks.
The British Belgian Blue Cattle Society is to change its name to the British Blue Cattle Society in a bid to create its own identity and promote its cattle in the future as British Blues.

Inputs/Supply businesses

The merger of the fertilizer and chemicals businesses of Terra and Kemira Growhow has been approved by the UK Competition Commission. The two firms account for about 60 per cent of the UK’s fertilizer market.
The herbicide Paraquat is to be withdrawn from use in EU member states following a ruling by the European Court of First Instance.
Fluopicolide-based blight fungicide Infinito gained the highest overall rating in the recently updated Euroblight 2007 fungicide comparison table.
Agrovista believes that increased interest in healthier diets containing more fruit and vegetables and greater demand for production of non-food crops for biofuels means demand for agrochemicals will increase.

Marketing

As a result of the introduction of the European Nutrition and Health Claims Regulation, fruit and vegetables can no longer be labelled with health claims such as “good for your heart” or “superfoods” without scientific backing. Any health claims must be verified by the European Food Safety Authority.

Miscellaneous

The Commission for Rural Communities 2007 State of the Countryside report indicates that the number of non-UK migrant workers in rural areas rose by 209 per cent from 20,970 in 2003 to 64,870 in 2006. In Herefordshire the increase in the same period was 933 per cent.
Framlingham Farmers and Atlas Agriculture are planning to merge. The combined group would represent over 1,000 farmers covering 550,000 acres.
Greenvale AP Ltd has acquired Swancote Foods Ltd, a potato processing business based in the West Midlands.
Brake Bros, the largest supplier of food to the catering industry in the UK, has been bought by US private equity group Bain Capital for £1.4 billions.
Flamingo Holdings, which produces flowers and vegetables in Kenya for sale to the UK, has been bought by James Finlay Ltd.
Syngenta has bought an Israeli seed company Zeraim Gedera.
John Dennis Fresh Produce of Barnsley has been put into liquidation, a direct consequence of Kwik Save entering into administration.
Redevelopment of the Royal Showground is being hampered by a dispute between the Royal Agricultural Society of England and the Stoneleigh trustees, former owners of the site.
Lady Hazel Byford has been elected president of the Royal Association of British Dairy Farmers.