Farming News Review - August 2009

<< back

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

Other crop news Other livestock news Inputs Marketing Miscellaneous

Policy issues

Defra has agreed to a voluntary industry-led approach to retaining the environmental benefits of set-aside in England. A partnership of farming, environmental groups and statutory bodies will seek to bring about environmental improvements mainly through agri-environment schemes.
A report from the Environment, Food and Rural Affairs Select Committee, “Security food supplies up to 2050 : the challenges faced by the UK”, states that although the UK should not aspire to be self-sufficient in food production, it should take advantage of its position to increase its contribution to help feed increasing global populations. While Defra figures show that Britain’s food self-sufficiency has fallen 9 per cent to 74 per cent and the trade gap in food and drink has risen by 50 per cent in the past 10 years, the committee said the Government had a moral obligation to reverse the trend and urged Ministers to produce a policy to increase production for a growing population.
Defra has called on the EU to relax its zero tolerance policy on GM soya. Farmers bodies have warned that the UK could see annual increases in feed costs of £30 millions if it became impossible to source non-GM feed.

CAP (etc.) support details/payments

A clause hidden in the European Commission’s dairy market report published this week states that a milk super-levy could be used to finance voluntary retirement from milk production or redistribute it to priority groups. However, UK dairy leaders said it would not happen and that it was ridiculous that any government would consider penalising its efficient producers who were able to profitably increase production to counter low milk prices.

Grants/regulations/legislation/environment

A Food Standards Agency – commissioned review of all papers published over the past 50 years relating to the nutrient content and health differences between organic and conventional food has concluded that organic food provides no nutritional or health benefits. The review was conducted by the London School of Hygiene and Tropical Medicine.
As part of The Low Carbon Transition Plan, Defra has announced that the farming industry must reduce carbon emissions by 6 per cent by 2020 or face Government intervention.
A consultation on the Draft Flood and Water Management Bill has proposed that plans to reduce flood risk could see a ban on certain farming practices such as ploughing across contours, leaving land bare during seasons of high flood risk and growing crops associated with high run-off rates.
The chemical manufacturer Syngenta is to provide £861,000 over a 5 year period to provide essential habitat and food sources for pollinating insects across Europe. The project will enable growers to cultivate wild flowers favoured by pollinating insects on the edges of fields.
The Young Entrants Support Scheme has been established under a new five-year Welsh Assembly scheme with a budget of £2 millions for 2010/11.
A farmer from Swansea has been awarded the first Forestry Commission Wales Better Woodlands for Wales Smallwoods grant. The scheme aims to bring 12,000 hectares of private woodland into management over the next 3 years.

Other matters of farm finance and tenure

Defra has secured £2.6 millions from the European Economic Recovery Plan to help develop rural broadband in England.
Knight Frank’s farmland index shows an increase of 3.1 per cent in the second quarter of 2009 following three consecutive quarters of falling prices. The average price of farmland was £4,820 per acre, 5.5 per cent lower than a year ago. Farmers accounted for 52 per cent of all deals done.
Similar figures published by the RICS report average bare land prices of £4,925 per acre with arable land down 1 per cent to £5,295 per acre and grassland down 2 per cent to £4,556 per acre.

Product prices

A. Crops

As harvest progresses across the Northern Hemisphere, prices are tumbling in the market place in reflection of: the ever-increasing availability of 2009 crop, the good reports being published and the higher than average levels of crop being carried forward in store by farmers. Milling wheat prices in particular have dropped from its relative market strength as favourable grain quality reports emerge. Strategie Grains and Coceral have both, in their latest reports, predicted the EU-27 2009 wheat crop as being marginally up on previous estimates, only adding to the downward pressure on prices. The progression of harvest is feeding through to the futures market where LIFFE wheat futures held relatively steady for most of the month, only to take a hit in the final days. At the end of July, deliveries in November 2009, 2010 and 2011 respectively stood at £106 (down £8 on June prices), £116 (down £4) and £125.
Average spot prices in late July (£/tonne ex-farm): feed wheat 90, milling wheat 127; feed barley 75; oilseed rape 203; feed peas 126; feed beans 126.
The predominant trade of the potato market switched from 2008 crop to 2009 crop this month. Average prices for 2009 crop started mid-month at £152/tonne, dropping back only marginally to £151 by the end of the month (strong due to the level of crop moving via contract); prices a year earlier were within 1% at £149/tonne. By comparison the 2009 crop free market price opened far lower at £118/tonne and fell back sharply to close the month at £109 (25% below prices in late July 2008) indicating that demand outside contract is weak. Prices for 2008 crop are sitting relatively low with best graded Estima achieving £145/tonne and similar quality Maris Piper achieving £155, whilst most good samples are changing hands for less than £100/tonne and poor samples are struggling to find a buyer at any price. Main crop harvest is yet to start for set-skin samples of many of the more common varieties.
At the end of July semi-set samples of Marfona and Carlita were achieving between £100 and £130/tonne for wholecrop, depending on local market forces. Maris Piper prices were far wider ranging, depending on level of skin-set and geography, achieving from £120 to £220/tonne.

B. Livestock

Average steer prices were somewhat less positive in July, dropping back throughout the month (to a lesser extent in the latter stages) to close 12p/kg down at 146p/kg lw; a 7 per cent drop over the month. Average heifer also dropped back early on, but recovered slightly at the end of the month to close at 151p/kg lw, increasing the premium to 5p/kg over steers. Dairy cows in late July were achieving an average price of £1,271 per head, down 5 per cent on prices at the end of June.
Lamb prices continued to slide as more new season lambs became available to the market. With a minor pause mid-month followed by further downward movement, prices by the end of the month were 138p/kg lw (an 11 per cent drop in the month). Prices in July 2008 were 8 per cent lower at 126p/kg lw.
The average pig price continued to rise over the course of the month, albeit marginally but showed signs of dropping back at the close of the month. By late July prices stood at 155p/kg lw (half a per cent above last month and 14 per cent above July 2008 prices)
The average farmgate milk price for May of 22.50ppl (reported in July) illustrated further weakening in the position, being a reduction of 0.76ppl compared to April prices. By contrast the average price for May 2008 was a full 1.99ppl (8.8 per cent) higher. Average milk quota prices have strengthened this month to 0.30ppl for clean holdings (based on 4% butterfat average).

Other crop news

Scientists at Leeds University have restarted a trial to develop genetically-modified potatoes. About 400 transgenic plants have been sown into a small plot near Tadcaster, North Yorkshire.
The first annual report published by the European Food Safety Authority on pesticide residues in food has found that 4 per cent of samples tested during the 2007 monitoring programme exceeded legal maximum residue levels. Two samples of organicallyproduced cereals and 26 samples of organically produced fruit and vegetables also exceeded the levels, representing 0.62 per cent and 1.09 per cent of all samples respectively.
The latest Defra statistics reveal that, in the past two years, the total area under vegetables in England has fallen by 10 per cent to 64,214 hectares. The cauliflower area has fallen by 1,061 hectares, lettuce by 722 hectares, spring cabbage and greens by 868 hectares to 1,478 hectares. Conversely the area down to baby-leaf salad crops increased by 20 per cent to 2,000 hectares.
The RSPB has called on farmers to create flower-rich margins around arable fields. A paper published in scientific journal Agriculture, Eco systems and Environment concludes that grass-only margins provide limited food resources for birds and are greatly improved by adding perennial flowering plants to the mixture.
Carrot sales have increased by 9 per cent to £235 millions annually with volumes up by 5 per cent to 321,000 tonnes.
Asparagus yields this year are expected to be down by 10-20 per cent due to the poor summer weather in 2008.
Branston has opened a £3.5 million facility for prepared potatoes in Lincolnshire.
The European Food Safety Authority is to commit £215,000 to research into the increase in the mycotoxin aflatoxin B1 in cereals as a result of climate change. Aflatoxin is produced by moulds growing on some cereals and is particularly prevalent in hot and humid climates and is carcinogenic.
KWS-UK, in partnership with Masstock, is trialling a range of purpose-bred energy maize varieties to examine their potential for biogas production. The company claims new varieties can produce fresh weight yields of up to 70 tonnes per hectare.
The soft-fruit industry has had a good first period of trading with strawberry sales up 13 per cent on 2008, raspberry sales up 24 per cent and blackberries up 78 per cent.
Camgrain has opened its 90,000 tonne grain storage and processing facility near to Cambridge.

Other livestock news

The Standing Committee on the Food Chain and Animal Health, part of the European Commission, has agreed to allow electronic tags to be read at marts and abattoirs thereby avoiding the need for most farmers to buy expensive tag reading equipment. However, the Commission has advised Defra that it will not consider any further changes to the EID rules before their introduction next January.
A report by the European Food Standards Agency has highlighted a series of animal welfare concerns in dairy herds across Europe. It concludes the genetic components underlying milk yield are “ positively correlated with the incidence of lameness, mastitis, reproductive disorders and metabolic disorders”.
A new working group, headed by Rosemary Radcliffe, has been established to advise on the proposed new independent body for animal health in England.
Animal Health has relaxed livestock movement licences for farms in low-risk TB areas by allowing farmers to apply for a general licence rather than licences for individual animals.
The Agriculture Council of the EU has agreed to extend butter and skimmed milk powder intervention buying beyond the end of August to next February.
The Government has secured £2.6 millions from the European Economic Recovery Plan to provide support for the dairy sector.
The National Pig Association has expressed fears that the import of weaners from Holland and Belgium could pose major health risks to the British pig herd, including the threat of the drug-resistant MRSA and Classical Swine Fever.
Research undertaken by Wisconsin-Madison University’s veterinary school has found that heat stress is a major trigger factor for claw horn disease and subsequent late summer lameness problems.
The latest data from TNS shows that retail sales of organic milk have increased by 4.5 per cent and 10.5 per cent over the last two four-weekly periods.
Robert Wiseman Dairies has increased its milk price by 0.3ppl to 24.32pl.
The entire 2008 wool clip has been cleared, the first time this has been achieved in the history of the British Wood Marketing Board. There is currently a world shortage of wool with supplies at their lowest level for 50 years.
Smokies – skin-on blow-torched sheep and goat meat – has been given approval by the Food Standards Agency provided it is legally produced in approved abattoirs. The trade is expected to be worth £3 millions annually to the UK red meat industry.
The Pirbright laboratory of the Institute of Animal Health is to be upgraded at a cost of £100 millions.
The Animal Livestock Identification Manufacturers Association has been formed to represent livestock tag manufacturers.
The Royal Agricultural Society of England is to host a new pedigree livestock show at Stoneleigh Park in 2011.
A revised version of “Casualty Pig” has been published by the Pig Veterinary Society.
United Auctions has opened a £15 millions auction mart in Stirling, amalgamating Perth and Stirling sales.
Anglo Beef Processors has acquired Sturminster Newton Abbatoir in Dorset.
Monk Brothers, one of Wales’ biggest livestock buyers, has collapsed owing an estimated £1.8 millions.

Inputs/Supply businesses

A new ADAS study, commissioned by the Agricultural Industries Confederation, claims that arable farmers could see reduced profitability in oilseed rape and subsequent cereal crops if regulators decide to restrict several key oilseed rape herbicides – carbetamide, clopyralid, metazachlor and propyzamide – and the slug pellet active ingredient metaldehyde under Water Framework Directive legislation.
The International Fertiliser Industry Association has published a White Paper on the sustainable use of fertilisers. It calls on governments to include agriculture in post-Kyoto plans.
The Court of Appeal has overturned November’s High Court ruling on pesticide spraying.
Growhow UK has published “Amazing Fertilizer Facts” in association with LEAF and also “Food, Farming and Fertilizers” which examines the role of fertilizer in the context of food security, climate change and environmental protection.

Marketing

The Milk Marketing Forum, which comprises the major milk companies and co-ops, has made available a budget of £9 millions for milk promotion over the next 3 years. The EU is to contribute one-third of the budget.v
The British Retail Consortium has reported that annual food price inflation was 0.7 per cent in June compared to 1.3 per cent in May with the annual rate down to 5.6 per cent from 6.4 per cent.
A report compiled by Cranfield University on behalf of Defra, “Comparitive Life Cycle Assessment of Food Commodities” has revealed that, while some foods may be better in terms of transport alone, they may be less environment-friendly in terms of energy use. Some UK-grown foods compare unfavourably against Spanish imports in terms of energy use as more is needed to artificially heat crops than in Spain where the temperature is warmer.
The consulting network, The Green Seed Group, which has offices in Europe, North America and Australia, is to take over Food from Britain’s overseas business.

Miscellaneous

The Scottish Crop Research Institute and the Macaulay Land Use Research Institute have agreed in principle to merge.
Tractor registrations in the first six months of 2009 are just 42 units behind the 9,224 sold in the same period of 2008 although sales slipped in the last quarter. Average tractor size has increased by 4.7 per cent to 140.3 hp.
MBM Produce has gone into administration with trading ceasing at its Bicker and Holbeach sites. Grant Thornton has been appointed administrator, the cause of the problem apparently being low margins over a sustained period.