Farming News Review - December 2009

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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

Defra is to conduct a programme of identifying where savings in its budget can be made but, in giving evidence to the Environment Food and Rural Affairs Select Committee, the Permanent Secretary gave assurances that any cuts would have a minimal impact on the delivery of vital services to farmers.
The Soil Association has claimed that converting the UK entirely to organic farming would have a “profound effect” on reducing greenhouse gas emissions. It has published research suggesting that at least 3.2 million tonnes of carbon would be taken up by the soil each year; on average organic farming produces 28 per cent higher level of soil carbon compared to non-organic farming; the widespread adoption of organic farming practices would offset 23 per cent of agricultural emissions through soil carbon sequestration.

CAP (etc.) support details/payments

The Rural Payments Agency has suspended all payments to UK Producer Organisations while Defra decides on a new policy on shared facilities such as packing and marketing. The Agency’s decision is as a result of a judgement issued by the Court of First Instance relating to France failing to comply with shared facilities rules.
French growers have been promised €650 millions of government aid and €1 billion of low-interest loans to aid production but the European Commission is examining whether the support is a breach of competition rules.
Natural England is to suspend applications for Entry Level Stewardship until late January 2010.
Hill farmers in Scotland are to benefit to the tune of £15 millions in January following a decision to increase payments under the Less Favoured Area Support Scheme by 19 per cent.

Grants/regulations/legislation/environment

The Campaign for the Farmed Environment has been formed by farming and conservation groups, with Government support. It aims to help farmers, growers and land managers protect and enhance the nation’s countryside. A network of “Beacon Farms” will be established to demonstrate how the Campaign will work in practice. Targets include increasing the area of key in-field Entry Level Scheme options by 40,000 hectares; retaining 179,000 hectares of uncropped land across England and improving the management of at least one-third of this to support habitats for birds, insects and mammals; increasing the current national level of voluntary environmental management by at least 30,000 hectares.
A study undertaken at Washington State University has claimed that conventional farming systems could be less harmful to the environment than so-called climate change friendly alternatives such as grass-fed beef, locally produced eggs and organic milk. The study claims that attention should be focused on strategies which make a long-term, positive contribution to enhancing sustainability rather than focusing on “quick-win, low impact” solutions.
Natural England has published “Vital Uplands : A 2060 vision for England’s upland environment”. It outlines how uplands should be managed including the sustainable production of food, wood and other raw materials, clean water supply from upland rivers and lakes and vibrant upland communities and economies. The Tenant Farmers Association has likened it to a “fairy tale”.
The Government’s Flood and Water Management Bill has had its first reading in Parliament. The Bill will give the Environment Agency overall control of flooding and coastal erosion nationally.
A study is being undertaken by Laurence Gould Partnership, on behalf of the Scottish Government, to determine ways of accurately measuring farmers’ contribution to greenhouse gas production.

Other matters of farm finance and tenure

Figures released by the Bank of England show that lending to agriculture increased by 3.4 per cent in the quarter to September to £11.2 billions, an average of 5.3 per cent over a year ago. The AMC increased its lending by 19 per cent while Clydesdale Bank and Yorkshire Bank increased their lending by 16 per cent.
Defra’s Farm Business Survey for 2008/09 shows an average farm business income of £50,900 for the year ending February compared to £48,200 in 2007/08. Specialist pig farms saw an increase of 800 per cent to £59,100 from £6,500 in the previous year; grazing livestock farms achieved an increase of 45 per cent to £18,500; income of dairy farms increased by 20 per cent to £69,400. But incomes of cereal farms fell by 8 per cent to £69,700.
About 25 per cent of fresh produce companies in the UK are finishing 2009 in financial difficulty and a prolonged period of consolidation is forecast. Plimsoll Publishing is forecasting a significant number of company failures early in 2010.
The 69th edition of The Agricultural Budgeting and Costing Book has been published by Agro Business Consultants. It forecasts 2010 feed wheat to sell at £105 per tonne at harvest but expects production costs to be £96 per tonne increasing to £113 per tonne if rent and finance charges are included. Dairying is expected to improve and foresees most optimism in the red meat sector.
The Seasonal Agricultural Workers Scheme quota is to be frozen at just under 25,000 workers until 2011.

Product prices

A. Crops

Wheat, pulses and oilseeds have seen further, albeit modest, price gains this month. The main factors arose in the Americas: the continued weakness of the US dollar and the delayed US maize and soyabean harvests having a positive effect, whilst the viability of Brazilian and Argentinean plantings, having now received the rain that was so badly needed, reined the positive market back. With renowned stock market pundits “talking up” the commodities market, speculative trading remains at levels that will continue to distort the market. Meanwhile, UK producers are still retaining relatively high levels of 2009 crop, hoping for price improvements later on in the season, which will only add to the volatility in the marketplace. LIFFE wheat futures at the end of November for deliveries in May 2010 and November 2010 and 2011 remained broadly unchanged at £113/tonne (£1 up on prices at the end of October), £115/tonne (static) and £120/tonne (static) respectively.
Average spot prices in late November (£/tonne ex-farm): feed wheat 100, milling wheat 117; feed barley 79; oilseed rape 233; feed peas 126; feed beans 126.
Average potato prices remained in the £90 to £100 per tonne region throughout the month. From October’s close of £92 per tonne, prices strengthened marginally, all but touching £100 per tonne by the middle of the month but dropped back in the latter stages. Prices in late November stood at £97 per tonne; 11 per cent below prices a year earlier which were just under £110/tonne. The free market price strengthened slightly from the opening level (£73/tonne) to £76/tonne in the early stages of the month and then stayed comparatively steady for the latter half. The closing position of £77/tonne was 25% below the November 2008 price of £103/tonne. Contract prices remain firm but now represent a smaller proportion of overall sales as free market throughputs increase. Most of the crop destined for the shelves before Christmas has already been secured by the packers.
At the end of November, King Edward were achieving between £100 and £140/ tonne and Estima were obtaining from £35 to £85/tonne, up to £100 for best quality samples. Melody were making between £60 and £85/tonne for wholecrop, up to £100 for best, whilst Romano prices held between £70 and £110/tonne. Maris Piper were achieving from £100, for average samples, up to £160/tonne for best quality, whilst Desiree were achieving between £70 and £120/tonne; £140/tonne for top quality

B. Livestock

Average steer prices reversed last month’s drop, making a steady gain of 2p/kg over the course of the month, to close at 150p/kg lw (up by one per cent). The average heifer price followed a similar path, also gaining 2p/kg, to close the month at 155p/kg lw, keeping the premium over steers at 5p/kg. The average price for dairy cows in late November stood at £1,369 per head, up 15 per cent on October.
Lamb prices came back this month with a fair amount of vigour, gaining 24p/kg over the course of the month. By the end of the month this put the average UK lamb price at 162p/kg lw; this is up 15 per cent on October’s close and 38 per cent above prices a year earlier.
The average pig price continued to follow the seasonal trend in line with previous years by losing a further 5p/kg. This gave a late-November price of 139p/kg lw, which is down 3 per cent on the October’s close, but still 5 per cent above the average price at the end of November 2008.
The average farmgate milk price for September (reported in November) continued the trend of the last two months, up by over three quarters of a penny to 24.05ppl. The average price a year earlier was 2.95ppl higher (12 per cent). Milk quota prices held steady this month at 0.45ppl for clean 4% butterfat holdings. Leased quota (4%) also held at October levels of 0.10ppl.

Other crop news

Cibus, based in San Diego, has developed a method of modifying the genetic make-up of crops, including oilseed rape and potatoes. The effect is to convey attributes such as herbicide and pest resistance, resistance to brusing in the case of potatoes and modification of the wheat protein which leads to coeliac disease in humans. Unlike classical GM technology, the approach does not involve the introduction or integration of foreign genetic material into the target crop plant.
2009 wheat quality has proved to be substantially better than 2008 but only marginally above average according to the Cereal Quality Survey published by HGCA. Hagberg Falling Number for wheat is 263 seconds, up 35 seconds on 2008 and 9 seconds above the 3 year average; average specific weight is up 1.4 kilograms to 76.9 kilograms per hectolitre; average protein content is 11.6 per cent, 0.4 per cent lower than the 3 year average; average moisture content is 15 per cent. Barley has shown a lower moisture content, higher nitrogen content and higher specific weight.
Rank Hovis has dropped the requirement for milling wheat to be tested for DON mycotoxin levels this season as a result of low levels of incidences discovered since harvest.
Hovis is to source all its wheat for bread making in the UK. For the past 5 years it has been trialling a strain of Canadian red wheat and now has 600 farmers growing on contract.
The Potato Council is proposing to increase its levy by 3 per cent in each of the next 3 years to a grower levy of £40.17 per hectare.
European pear production is expected to reach 2.52 million tonnes this year, a 16 per cent increase on 2008 levels. Dutch production is up 81 per cent to 311,000 tonnes; Belgium’s crop is up by 65 per cent to 281,000 tonnes; the French crop is up by 23 per cent to 193,000 tonnes; Italy’s crops has increased by 8 per cent to 817,000 tonnes. However, the Spanish crop will be down by 10 per cent at 427,000 tonnes.
Branston Ltd is to build an anaerobic digestion plant to produce electricity from waste potatoes in Lincolnshire.
British Sugar has announced that it has received 90 per cent of all contracted tonnage and tonnage is being leased for up to £2.50 per tonne between growers. An additional temporary tonnage of 800,000 tonnes, which does not qualify for the £1 transport allowance, has been taken up by growers.
A survey is to be conducted by English Farming & Food Partnerships, on behalf of Defra, into the declining production of UK fresh produce. The survey is examining business collaboration, environmental sustainability and the sector’s use of producer organisations.
The Food & Environment Research Agency is seeking growers’ views on a pest research analysis into the tomato leaf miner, a pest which emanates from South America and which has wiped out entire crops in Spain.
Trials at Gala orchards in Kent have indicated that pollination by the red mason bee resulted in “significant differences” in the firmness of fruits.
Cameo was voted the tastiest apple at the National Fruit Show for the second consecutive year.
Scientists at the Queensland Primary Industries and Fisheries have developed a new variety of apple which is thought to be resistant to black spot.
The English Braeburn crop is expected to be 18,000 tonnes this year, an increase of 220 per cent on 2008.
Red Princess, a new strawberry variety, is to start commercial production in Scotland next year. It has been bred by ReDeva, part of the Total Produce Group.

Other livestock news

Arla is to build the world’s largest dairy processing plant on the outskirts of London. The plant will be capable of producing one billion litres of milk a year and is due to open in 2012.
Dairy Crest is to pay a liquid milk price bonus of 0.2ppl for November deliveries.
Scientists at the Biotechnology and Biological Sciences Research Council’s Institute of Animal Health have warned that an outbreak of African swine fever virus in Northern Russia poses a real threat to the British pig industry. There is no cure or vaccine for the highly contagious virus which can survive for months in cold store meat and for years in frozen carcases.
The Medical Research Council, Wellcome Trust, Biotechnology and Biological Sciences Research Council and Defra have launched a £7.5 millions project to study the development and spread of swine flu.
Animal Health has written to all herd owners in England advising them of the parish testing interval and herd testing interval which will apply from January.
The number of new bovine TB incidents in herds fell to 3206 in Great Britain to the end of August compared to 3,400 in the same period last year despite more cattle and more herds having been tested.
MRSA has been discovered in pigs in 17 of 24 EU member states but not in UK herds. Spain has the highest level with 51 per cent of herds testing positive.
The British Veterinary Association has launched an eight point plan for the responsible use of antimicrobials.
The National Beef Association is to increase levy charges by 20 per cent in Scotland to fund Quality Meat Scotland.
The total number of cattle and calves on Welsh farms fell by one per cent to 1.13 millions in the past year according to the Welsh Assembly June census. Pig breeding animals rose from 21,000 to 22,000 while poultry numbers rose by one per cent.
The latest British Cattle Movement Service data show that the registration of beef calves fell by 5 per cent in the year to July, down by 108,000 to 2.1 millions. Limousin and British Blue accounted for nearly two-thirds of the decline.
The Survey of Health and Pesticide Exposure, produced by the London School of Hygiene and Tropical Medicine, and the Study of Health in Agriculture Workers, produced by the University of Manchester, have both been published by Defra after years of delay. Both surveys relate to the effects of the use of organophosphate sheep dips on human health.
A report part funded by the Department of Health claims that efficiency improvements in the food and farming sector “must be accompanied by a 30 per cent reduction in livestock in high-producing countries to meet climate change targets”. It goes on to say that this would have positive effects on human health through reductions in heart disease if it translated into reduced meat and saturated fat consumption.
Waitrose has instigated a scheme whereby all the cereals used by BOCM Pauls to produce the feed for the supermarkets’ pork producers will be sourced from within 50 miles of the mill.

Inputs/Supply businesses

Rotam CropScience has opened a European headquarters in Peterborough.
Bayer CropScience has gained approval for use of the field fungicide Rudis on brussel sprouts.

Marketing

The latest Eblex Beef and Lamb Watch survey has reported a decline in home-produced meat being sold in supermarkets. Tesco and Asda both stocked foreign lamb during October while Asda and Sainsbury’s stocked imported beef.
The Red Tractor logo now features on products with an annual retail sales value of £10 billions, a rise of £1.5 billions in the past year, according to Assured Food Standards.
The health campaign “Fruitness, enjoy it!”, aimed at getting children to eat more fruit, has been awarded a further three years’ of funding by the European Commission.

Miscellaneous

Tractor sales above 50hp to the end of October 2009 totalled 13,838 units, 12.3 per cent down on the same period in 2008.
Warwick University is to close its Horticultural Research International centre at Wellesbourne to cut costs. The centre is to be integrated into the main campus Biological Sciences department which will be reformed as the School of Life Sciences.
William Worsley, a Yorkshire farmer, has been elected as the new president of the Country Land & Business Association.
Christine Tacon, managing director of The Co-operative Farms, is to be chairman of the 2011 Oxford Farming Conference.