Farming News Review - January 2008

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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 has unveiled its consultation document into cost and responsibility sharing for animal disease control. Proposals include abattoirs bearing some Meat Hygiene Service costs relating to BSE controls and paying for BSE tests on over-30 month cattle entering the food chain; farmers bearing some of the costs of testing and disposing of over-24 month fallen adult cattle and costs of the National Scrapie Plan. It recommends grading livestock businesses as High, Medium or Low Risk depending upon their level of biosecurity and payments under any cost-sharing mechanism would be based on this level of risk. Deadline for responses is 15 April and legislation is not expected until 2009 at the earliest.
The European Union has announced that compulsory recording of individual sheep movements by electronic identification will be effective from 1 January 2010.
EU Ministers have rejected draft proposals for an EU Soils Directive claiming it had not been possible to attain a “qualified majority” needed to reach political agreement.

CAP (etc.) support details/payments

Following a successful pilot run, Single Farm Payments in England began last month and by the end of December full payments had been made to 50,000 claimants.
EU Commissioners have proposed a 2 per cent increase in dairy quotas, a total of 2.84 million tonnes, in response to growing demand for milk and dairy products. The increase will come into effect in April and will apply to all 27 member states.
Defra has announced that land under orchards and nursery crops will be eligible for Single Payments from the 2009 scheme year.
EU Commissioners have announced that management plans, including nutrient and crop protection management, can no longer be used to qualify for funding under Environmental Stewardship Schemes. It is expected that 1,800 farmers who have made provisional agreements in the past year will be below the 30-point threshold for entry.

Grants/regulations/legislation/environment

The Scottish Government has committed funding to help farmers meet the European Commission demands to control excess nitrate pollution. Grants of up to 40 per cent will be available for new or expanded slurry storage.
An aid package worth £116 millions to the UK has been approved by the European Commission. The grant must be spent within a year on uninsured damage to infrastructure and clean-up work.
The Farming Futures coalition, comprising the NFU, CLA and the Applied Research Forum, has been awarded £250,000 by Defra to raise awareness about the opportunities and threats linked to climate change.
A study commissioned by the British Crop Protection Council and undertaken by the University of Nottingham has found that the carbon footprint of weed control for the organic production of potatoes is more than three times greater than that of conventional production.

Other matters of farm finance and tenure

The Outlook 2008 survey conducted by Andersons predicts that the UK’s total income from farming could rise to over £4 billions in 2008 compared to about £3 billions in 2007.
Waverley Borough Council has finally granted planning permission to the Hall Hunter Partnership for 20 hectares of polytunnels at its farm in Surrey.
An independent review of the Gangmasters (Licensing) Act has found that, while in general the Gangmasters Licensing Authority has been effective, many labour users remain sceptical concerning its impact.
The British Independent Fruit Growers Association is to challenge the Assured Produce Scheme by questioning the rights of its auditors to suspend members.

Product prices

A. Crops

The cereal market ‘roller-coaster ride’ seen in past months shows no sign of letting up. Reports of the Australian wheat belt finally getting some useful rain saw futures prices drop back, but this was partially countered by reports of heavy frosts stunting Argentine cereal crops. The publication of EU 2008 crop estimates, indicating a rise in acreages, saw further downward pressure on futures. With world stocks at reported lows, there is still much uncertainty in the market. Wheat prices, both milling and feed, showed strength over the month, closing £95/t and £75/t above 2006 prices respectively. Oilseed rape prices, after the price leap seen in November, dropped back marginally early on in the month, but recovered from this and strengthened further, now sitting £100/t above 2006 prices. Average prices late December (£/tonne ex-farm): feed wheat 164, milling wheat 195; feed barley 165; oilseed rape 270; feed peas and beans 198.
Average potato prices rose slightly in the early stages of the month, remaining steady from then until the Christmas shutdown. The latter part of the month saw prices holding at £155/tonne. The free market retained its £11 premium at £166/tonne. Trade in December was limited as most buyers had already secured their Christmas orders. Premiums are still being offered for good quality samples, in particular those with good baking content. Average prices sit £18 higher than this time last year. In late December, King Edwards were down, achieving between £150 and 190/tonne; Desiree was achieving similar levels - £210/tonne for top quality; good quality samples of Estima with high baker content were obtaining £200 to £240/tonne. Good samples of Maris Piper were being traded at between £180 and £210/tonne.

B. Livestock

In a similar trend to last year, the desire for Christmas beef lead to a short, sharp price increase. The average steer price jumped from the November close of 112p/kg lw up to 122p/kg in the first week. This price level was short lived as, within a further week, it had dropped back to 113p/kg, on a par with prices a year earlier. There was little trading over the Christmas period, but the new year has seen initial prices of between 115 and 120p/kg.
UK average lamb prices, starting from a November closing position of 80p/kg lw, remained quite flat in the first half of December, peaking at 82p/kg. In the lead up to Christmas, prices picked up, climbing above 95p/kg. Prices of 100p/kg lw, 10p above those a year earlier, were recorded before trading ceased for the Christmas break.
The average pig price held relatively steady again this month despite the demand for festive season ham; prices opened at 109p/kg dw, climbing slowly to 110p/kg mid month, before dropping back marginally to its closing position. Prices by late December were 109.5p/kg dw; 2p/kg above prices at the same time in 2006.
The average farmgate milk price for October (reported in December) gained a further 3.4ppl on the September price, reaching 26.5ppl; now 8ppl above prices a year earlier. Quite apart from its intended ”soft landing” for the abolition of the current quota regime, the EU has proposed to increase milk quotas in all member states by 2% from 1 April 2008 to meet the predicted internal demand. Demand for milk quota remains low. Clean, 4% butterfat holdings were changing hands in late December for 1.65 ppl, marginally down on last month.

Other crop news

The Scottish Crop Institute is joining a consortium with funding of £1.7 millions to find ways of controlling Globedera pallida, a parasitic worm which damages potato crops.
A survey of growers by Grainfarmers has indicated that spring crop plantings could be up by as much as 5 per cent this year, primarily spring barley, but the increase will be heavily dependent on seed availability.
Defra has postponed the need to provide HM Revenue & Customs with quarantine release certificates as a result of difficulties being experienced with its PEACH system for planthealth certificates.
Of the 49 samples of fresh produce supplied to schools last summer and tested by the Pesticide Residues Committee, three contained residues over the maximum residue level, one sample of Gala from Brazil and two of sugar snap peas from China.
The National Fruit Collection is expected to remain at Brogdale Farm, Faversham, for the foreseeable future. It is intended that Reading University will take over the maintenance and curation of the collection from April.
Sales of Conference pears by November were 58 per cent up on the previous year despite the total crop only being 6 per cent bigger, prompting fears of an early end to the selling season.
Sales of Bramley apples in September and October were up 24 per cent on a year earlier.
Surrey-based grower, Shackleford Mushrooms, is to cease production after more than 50 years of trading with the loss of 85 jobs.

Other livestock news

Defra has declared a vector-free period for bluetongue disease allowing livestock to be moved out of restricted zones into free areas. The period is expected to last until March.
Livestock imported from the Netherlands and infected with bluetongue disease were found on a farm near Worcester last month while the virus has also been found in Scotland on cattle imported from Germany. NFU has called upon Defra to ban imports from EU bluetongue zones until they have developed a strategy to ensure imported livestock can be properly policed.
Defra has announced that 22.5 million doses of vaccine for bluetongue serotype 8 have been ordered from Intervet.
The EU food safety commissioner, Markos Kypriano, supported by the Standing Committee on Food Chain and Animal Health, has told Brazil that it must meet in full the TRACES regulations, the basic standards for tracing the movement and origin of products imported to the EU. It is expected that 97 per cent of farms in Brazil will be unable to meet these rules. The new rule will come into force at the beginning of next month.
The European Commission has approved an increase in its budget for the control and eradication of animal diseases to £187 millions for 2008.
Sir Bill Callaghan, chairman of the Health and Safety Commission, has recommended that responsibility for regulating animal pathogens is transferred from Defra to the Health and Safety Executive.
Defra has lifted all restrictions associated with the outbreak of H5N1 avian flu in Suffolk.
At the end of October, 5,759 herds across Britain were under a TB2 restriction compared with 5,215 at the same point in 2006.
The latest Milk Development Council figures for England and Wales show a fall in producer numbers of only 43, the lowest for some time.
The Eblex Business Pointers data for the year to last March, from 55 LFA suckler herds with an average herd size of 69 cows, showed an average net margin loss of £151.
The world’s first milk-disciplinary zoorosis research centre has been officially opened at Liverpool University’s veterinary field station at Leahurst, near Ness, Wirral.
The 2008 National Holstein Show has been cancelled due to concerns over bluetongue movement restrictions.
Plans to build a £70 millions cheese plant in Cumbria have been abandoned after the business behind the project was sold to Meadow Foods which is only interested in securing the milk supply contracts.
J. Rainford and Sons has merged with WA McHardy and Sons creating one of the largest egg producers in the north-west.
The Association of Pigswill Users has vowed to continue with its claim for compensation after an Ombudsman’s inquiry found Defra guilty of maladministration banning pigswill in 2001.

Inputs/Supply businesses

Blight fungicide sales increased by 40 per cent in the summer of 2007 compared to previous years as a result of weather conditions.

Marketing

Supermarkets and dairy companies, including Sainsbury’s, Asda, Dairy Crest, Robert Wiseman and the Cheese Company have agreed to pay fines totalling £116 millions following the investigation by the Office of Fair Trading into allegations of price fixing in dairy products in 2002 and 2003. Cases against Tesco, Morrisons and Lactalis McLelland continue.
According to the Office of National Statistics, food price rises are currently running at three times the general rate of inflation and have risen to their highest level for 14 years. On average the price of fruit and vegetables has risen by 23 per cent over the past year.
The British Independent Fruit Growers Association has called upon the Competition Commission to install a “permanent proactive regulator” to supervise the dealings of all multiple retailers.
The British Retail Consortium has redrafted and republished its “Global Standard for Food Safety” and “Global Standard for Packaging and Packaging Material” guides.
Research from Verdict Consulting has suggested that UK consumers aged 65-74 will increase their retail expenditure by 75 per cent in the next decade making it the fastest growing age bracket.
A report by Riverford Organic Vegetables has suggested that organic produce delivered to homes of consumers by box schemes is at least 40 per cent cheaper that supermarket organic produce.
Janic Import & Export Ltd has merged with Keelings UK Ltd.
Mack Wholesale has purchased the fruit and vegetable division of RT Julian & Son, Cornwall.
Horticultural Marketing Inspections has successfully prosecuted JH Haslam (Preston) Ltd for displaying and selling sub-standard lettuce and satsumas.

Miscellaneous

While Defra staff have rejected strike action, more than 71 per cent of staff who voted in a ballot were in favour of industrial action in protest at an imposed pay settlement.
Production at the Doncaster plant of McCormick tractors ceased last month after 58 years.
Members of the farming industry featured in the New Year’s Honours list. Debby Reynolds, former Government chief vet, has been awarded a CB; Tim Brigstocke, former chairman of the Royal Association of British Dairy Farmers, an MBE; Bob Fiddaman, the NFU’s employment spokesman, an MBE: David Picton Jones, Welsh poultry expert and breeder, an MBE.
Michael Holmes, a leading member of the horticulture industry, has died.