Farming News Review - June 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 European Commission is expected to make measures to combat climate change part of the Common Agricultural Policy. A document is to be published this month which will warn that the farming implications of global warming must be taken into account in the restructuring of the policy.
The Industry Committee of the European Parliament has put forward proposals on key plant protection legislation including measures for the Sustainable Use Framework Directive and for a regulation about the pricing of plant protection products on the market. The proposals have been welcomed by the European Crop Protection Association.
The proposed new US Farm Bill has been attacked by environmental groups which believe several land stewardship schemes would be under funded.

CAP (etc.) support details/payments

The Environment, Food and Rural Affairs select committee has called for the CAP to be replaced with a new rural policy for Europe which addresses issues such as environmental protection and climate change. The committee has claimed the objectives for CAP have not changed in 50 years. The NFU has labelled the committee’s conclusion “naive”.
Latest figures show that 95.3 per cent of claimants have received a full or partial payment of the 2006 Single Farm Payment representing 88.6 per cent of the total fund.
Defra is to be fined a total of £36 millions for making late payments to farmers under the old IACS scheme.

Grants/regulations/legislation/environment

Defra and Natural England have announced a progress review of Environmental Stewardship to include new incentives for farmers to improve their carbon footprint.
The Government has published its strategy for cutting waste, encouraging individuals and businesses to recycle and compost 40 per cent of waste by 2010 rising to 50 per cent by 2020.
“The Biomass Strategy”, a Government report on the future role of biomass in energy generation, has identified the need for a further 350,000 hectares of UK farmland to be in energy production by 2020.
A report from the Advisory Committee on Releases to the Environment has stated that the approval processes for genetically modified and conventional crops are fundamentally flawed and biased against GM.
A poll undertaken by the British Grassland Society has found that 47 per cent of members are in favour of cultivating genetically modified crops on their farms while 75 per cent will grow in response to demand.
The RSPB, Campaign for the Protection of Rural England and the Game Conservancy Trust have all called for new conservation measures to be introduced if set-aside is abolished in 2008, as widely expected.
Government agencies have launched a new survey of the English, Scottish and Welsh countrysides, using 60 scientists to cover over 600 square kilometres. The objective is to collect information on soils, small rivers and ponds, plant communities and habitats on farms, woods, heathland and moors.
The Monarch report, the result of a 7-year research programme led by Natural England, has revealed that some of the UK’s most valued plant species could come under threat as a result of climate change.
The Department for International Development has awarded £10 millions to the Global Crop Diversity Trust to help create a seed bank to secure essential food crops for the future.
All fresh and frozen fruit and vegetables sold through Waitrose are to be sourced from Linking Environment & Farming assured suppliers from 2010.
A study published in Occupational and Environmental Medicine has found that people who had been exposed to low levels of pesticides were 13 per cent more likely to have Parkinson’s disease compared to others while those exposed to high levels were 41 per cent more likely to be affected.
Researchers at the University of Warwick have found that boiling vegetables severely damaged the anticancer properties of many brassica vegetables such as broccoli, brussel sprouts, cauliflower and green cabbage.

Other matters of farm finance and tenure

Changes to the statutory minimum farm wage, set by the Agricultural Wages Board, will result in a 3.2 per cent increase for grade one workers and a 4.5 per cent increase for grades 2 to 6. The NFU has estimated the cost to British farming at £50 millions.
Bank of England base rate increased again by 0.25 per cent to 5.5 per cent adding about £20 millions to farmers costs.
The NFU and British Summer Fruits have agreed to help fund a judicial review of Herefordshire Council’s decision to make polytunnels subject to planning permission.
The Gangmasters Licensing Authority has made a number of raids on salad and vegetable preparation plants uncovering bonded labour, the withholding of passports, illegal deductions, lack of proper contracts, long hours, unsafe and overcrowded accommodation and the minimum wage not being paid. The GLA has refused a licence renewal for Hullbased fresh produce industry labour provider FocusStaff.
According to figures revealed in a parliamentary question, one in three farmers is living below the poverty line as 31 per cent have an income of 60 per cent or less of the national average.

Product prices

A. Crops

This month has seen rain across UK and Europe stalling the expected price-rises as concerns of European drought have now dissipated. Ukraine, Poland and Hungary, however, have reported irreversible damage to oilseed crops as a result of the prolonged dry spell. Concerns in April of major frost damage to the US cereal crop appear to have been over-dramatised as reports are now suggesting good crop recovery. Overall, this growing season is showing further signs of being unpredictable; expect prices to be equally unpredictable. Average prices in late May (£/tonne ex-farm): feed wheat 96, milling wheat 102; feed barley 91; oilseed rape 166; feed peas and beans 93.
Average potato prices started positively in May, regaining April’s peak of £177/tonne early on, but then proceeded to tail off over the remaining weeks, to end the month at £161/tonne. The current price is down £10 from April’s close but is still £28 above prices in May 2006. Overall trade remains steady for packing and processing, as contracts are being called in as expected, but as new crop from abroad arrives on the market, demand from buyers in the chipping and frying sectors is dropping fast. The UK free market is drying up for samples of low and medium quality but demand remains for good quality and high baker content. In late May King Edwards were achieving between £180 and £200/tonne. Prices for Desiree have fallen to between £160 to £210/tonne for good quality. Maris Piper supply is still tight, which is maintaining prices; top grade samples are achieving £260 to £300/tonne, whilst samples of Estima are now priced between £140 and £200/tonne.

B. Livestock

The average steer price lost 4p/kg in the first half of the month, down to 109p/kg lw as the low world price encouraged imports into the UK. Over the latter half of the month the price recovered slightly to end May at 111p/kg lw, 1p/kg lower than the price at the end of May 2006.
UK lamb prices continued to disappoint this month, mainly attributable to the increased presence of New Zealand lamb in continental Europe. The price dropped from its opening position of 120p/kg lw to a low of 106p/kg lw, but by the end of May the prices had strengthened slightly to close at 119p/kg lw, a full 30p/kg below May 2006.
The average pig price continued to improve this month, following the expected seasonal trend. Prices opened at 106.5p/kg dw and closed at just below 108p/kg dw, a full 6p/kg higher than those seen a year ago.
Average milk prices, whilst dropping back further to17.8 ppl, are demonstrating resistance to the marked seasonal drop seen at this time of year in 2006 and 2005. Increased prices from both Milk Link and Dairy Crest have been publicised this month. Milk quota trading continues remains comparatively buoyant, seeing prices improve further this month. A clean, 4% butterfat holding obtained 2.72 ppl in late May; an increase of 0.5 ppl over late April.

Other crop news

Concern is growing at the shortage of migrant labour to pick this year’s soft-fruit crop. A survey by the NFU of 13 soft-fruit and vegetable growers disclosed the businesses were 2,400 workers short of the estimated 4,400 needed for the harvest. The collapse in the numbers of workers coming from Poland and the Czech Republic is largely to blame.
East Malling Research Station has been awarded a 3-year contract by Defra to genetically fingerprint the 2,300 varieties of apples and 250 varieties of pears in the National Fruit Collection.
The Friends of Brogdale Horticultural Trust has voted to withdraw its support for the Brogdale Horticultural Trust if Defra allows the world’s largest fruit tree collection to be removed.
Soft-fruit breeder, Redeva, has launched two new varieties of strawberry, Red Glory and Red Princess, specifically developed for the UK climate.
Bulmers, the world’s largest cider producer, has announced plans to plant 400,000 new apple trees on nearly 500 hectares to cope with growing demand for its product.
The Horticultural Development Council has published a revised version of its Weed Control Handbook.
Simpons Malt is investing £12 millions to increase capacity at its Berwick-on-Tweed plant by 40,000 tonnes to 180,000 tonnes.
A new flour mill, producing the only commercially grown organic spelt crop, is to be opened at Sharpham Park, near Glastonbury in Somerset.
Branston has launched two new varieties of potatoes, Bellini and Piccalo, initially to be sold exclusively in Tesco stores.
BASF has been given permission to conduct a trial of genetically modified potatoes at a farm in east Yorkshire.
As a result of a shortfall in its attempts to reduce overproduction, the European Commission is to offer sugar beet growers compensation in return for up to 10 per cent of national quota.
An increase in imports and the consequent effect upon prices has resulted in a number of cauliflower growers ceasing production amid claims that many more growers are expected to follow suit.

Other livestock news

A report from the English Beef and Lamb Executive has identified that retailers are undervaluing meat and could raise prices. Consumers buying habits over the past 5 years have indicated that price increases in the beef and lamb sector had little or no adverse effect.
The low pathogenic H7N2 form of avian flu has been confirmed on a smallholding in North Wales.
Dr Christianne Glossop, the chief veterinary officer for Wales, has warned that it is only a matter of time before bluetongue arrives in the UK and the Met Office believes that large areas of the country are likely to be under serious threat from July onwards.
Inspectors from the European Commission’s Food and Veterinary Office have concluded that, while there is a largely functioning import control system in place in the UK for meat and live animals, a number of weaknesses still exist despite recommendations for improvements having been made in previous reports.
Milk Link and Dairy Crest have announced producer price increases from 1 July of 0.5 ppl and 0.4 ppl respectively.
Arla Foods is outsourcing the auditing requirements of Arla Foods Milk Partnership to Cheshire based CMS UK.
The “British Milk – What Price 2007” report, published by the Royal Association of British Dairy Farmers and the NFU, estimates that dairy farmers are losing an average of 3.42 on every litre of milk produced. It forecasts that 3,000 of the UK’s 18,000 dairy farmers will leave the industry during the next two years. Government figures show that one dairy farm has closed on each day over the past four years.
National Milk Records is to use its lifetime daily yield data to select winners in the new Arla/NMR production and efficiency awards.
A new research project involving the Institute of Grassland and Environmental Research in Aberystwyth, ProSafe Beef, is aiming to reduce microbiological contaminants in beef and beef products and to enhance quality, choice and diversity in the beef chain. Funding of over €1 million is involved.
The British Pig Executive has launched a Pig Industry Professional Register to recognise professionalism and encourage lifelong learning.
New rules on the stocking density of broilers have been agreed by EU Farm Ministers but the higher standards will not be introduced before 2010.
Morrisons and Sainsburys have announced plans to cease selling battery eggs by 2010 and 2012 respectively.
The Queen is to sell her Ayrshire dairy herd which has been based at the Royal farm at Great Windsor Park for the past 56 years.
The British Veterinary Association Animal Welfare Foundation has announced funding for projects designed to improve the welfare of sheep, cattle and horses.
Brazil has begun a campaign to vaccinate its 120 million cattle against foot-and-mouth disease with the aim of completion by 2009.

Inputs/Supply businesses

Yara International, the world’s biggest fertilizer company, has acquired 30.05 per cent of Kermira GrowHow Oyj and made an offer for the remainder of the stock. If completed Yara’s worldwide market share would increase to 7 per cent and to 29 per cent in Europe.
Bayer CropScience has opened two centres of excellence at the company’s research farms at Chishill and Shelford in Cambridgeshire, to promote practical and meaningful approaches to improving on-farm biodiversity.

Marketing

According to the government’s Family Food 2005/06 report, sales of fresh fruit and vegetables rose by 8 per cent in 2006, the highest annual rise in the last 20 years.
Figures from the Office of National Statistics have revealed a surge in supermarket prices for fruit and vegetables apparently caused by last year’s high temperatures. Prices of potatoes, onions and apples have risen by more than a third.
The Covent Garden Market Authority and the South East Food Group Partnership are setting up a three year project designed to increase the volume of produce from the South East into the London foodservice and public sector. The initiative will be funded in part by the South East of England Development Agency.
JR Holland, based in Yorkshire and the North-east has been named the 2007 Overall Produce Trader of the Year.

Miscellaneous

The Forestry Commission is to increase the supply of woodfuel by 2 million tonnes a year by 2020.
Sales of new tractors in 2006 in Europe are expected to have shown a one per cent increase over 2005. Sales in the three major countries, Italy, France and Spain fell but this was compensated by a 23 per cent increase in the German market.
A CLA-sponsored private members bill to amend the Animals Act proposes to remove liability from livestock owners if animals are “spooked” and cause injury. The bill has the support of the Government.
BOCM is acquiring the feed division of Cranswick Mill, the pig and poultry feed manufacturer.
Lord Sandy Bruce-Lockhart, Kentish fruit farmer, has been appointed chairman of English Heritage.
John Hall, Chair-designate of the Horticultural Sector Company, has resigned from Levy Board UK. Andrew Colquhoun has been appointed on an interim basis.