Farming News Review - November 2011

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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 Government has rejected recommendations from MPs to give the Groceries Code Adjudicator more powers. It has rejected a proposal from the Business, Innovation and Skills Committee to grant the adjudicator powers to fine retailers as soon as it is established and it has indicated that it will not allow information from trade associations, and possibly whistle blowers, to act as a trigger for starting investigations.
Defra has repeated its reluctance to adopt EU proposals requiring compulsory milk contracts preferring to see a voluntary, industry-led approach.

CAP (etc.) support details/payments

Agriculture Commissioner Dacian Ciolos has unveiled his CAP reform plans. The overall support for UK farming will be largely unchanged in the period 2014-2020 but there will be a Basic Payment Scheme, subject to cross-compliance; a compulsory greening element of 30 per cent; a compulsory small farmers scheme of 10 per cent; a compulsory young farmers scheme of 2 per cent; a voluntary scheme for areas with natural constraints of up to 5 per cent; a voluntary coupled payments scheme of up to 10 per cent. Only “active farmers” will qualify for direct payments; applicants would need to demonstrate their direct payments represent at least 5 per cent of any non-agricultural income. To receive the 30 per cent greening element farmers must maintain 95 per cent of permanent pasture; cultivate at least three crops on arable land of more than 3 hectares with no one crop accounting for more than 70 per cent and no one crop accounting for less than 5 per cent; maintain an “ecological focus area” of at least 7 per cent (excluding permanent grassland), including field margins, hedges, trees, fallow land, landscape features, buffer strips and afforested areas.
A report by the International Centre for Trade and Sustainable Development predicts the CAP greening measures could add €5 billions to EU farmers costs. It predicts higher feed prices will reduce EU pig and poultry production and constrain any expansion in milk production.
The new flat-rate values per hectare for the English regions under the 2011 Single Payment Scheme are Non-SDA £251.28; Upland SDA, other than moorland, £202.75; Upland SDA moorland £35.38.

Grants/regulations/legislation/environment

Scientists at the Moredun Research Institute and the Roslin Institute have been granted £1 million to research the immune systems of livestock and develop sheep and cattle vaccines.
The Biorefinery Centre has opened at the UK’s Institute of Food Research in Norwich. The aim is for the centre to become the focus for scientists to explore new ways to make use of residual plant materials such as cereal and oilseed rape straw, brewer spent grain and cereal milling waste in an attempt to address the challenge of producing low carbon biofuel.
Despite being in one of the driest parts of the country and mirroring the trend of highly productive arable farms elsewhere, the RSPB’s Hope Farm in Cambridgeshire has seen its Farmland Bird Index rise by over 200 per cent since 2000 while across the rest of the UK the Index has fallen by 11 per cent. Skylarks have increased from 10 to 42 pairs; yellow hammer from 16 to 33 pairs; linnet from 5 to 26 pairs.
PepsiCo UK has achieved “zero waste to landfill” status at 11 of its major manufacturing sites including Walkers in Leicester and Quaker Oats in Cupar.
The Heritage Lottery Fund has awarded the Bumblebee Conservation Trust £340,000 to fund a 3-year Stirling University-based programme to raise awareness of the importance of bees.
Frontier Agriculture has donated £170,000 to Harper Adams University College to create the Frontier Crops Centre.
Kingspan Renewables has acquired the business of Proven Energy after the Ayrshirebased firm was forced to call in receivers.

Other matters of farm finance and tenure

Following voting on the Public Bodies Bill, it has been confirmed that the Agricultural Wages Board will be abolished.
The NFU 2011 farmer confidence survey shows 48 per cent of farmers feel “more confident” about the next 12 months compared with 27 per cent a year ago. 50 per cent of farmers feel “more confident” about the next 5 years. However, 30 per cent feel “less confident” about the next 12 months, in particular poultry, horticulture and pig sectors.
NFU Mutual has reported 142 sheep rustling claims in the first 6 months of 2011 compared to 156 in the whole of 2010.

Product prices

A. Crops

Within the industry, the pressures on the grains market are largely bearish; originating from reports of above-expectation maize production in Western Europe, progress of the US cereals harvest and the most recent US quarterly stocks report. The International Grains Council’s October report recorded the 2010/11 harvest total grains yield as 1,750 million tonnes (35 million tonnes below the expected consumption) and the latest estimate for the 2011/12 harvest yield is now almost one per cent higher at 1,819 million tonnes (8 million tonnes below expected consumption) due to increased expected wheat and maize output from Western EU countries, China and South America. The European debt crisis continues to apply downward pressure to prices and this is exaggerated by the commodity traders and currency fluctuations. LIFFE feed wheat futures have weakened further in the long-term, but improved marginally in the short to medium term as the market settles following harvest [but with the inevitable intervention of commodity traders]. In late October, deliveries for November 2011, 2012 and 2013 stood at £153/tonne (up £2), £146/tonne (up £2) and £144/tonne (down £7) respectively. Average spot prices in late October (£/tonne ex-farm): feed wheat 145; milling wheat 156; feed barley 144; oilseed rape 357; feed peas 174; feed beans 175.
The average potato price continues to disappoint and concern growers, dropping further into the unsustainable. By late October, the weekly average was down to £99/tonne, £10 lower than September’s close and £29 below the October 2010 average. The free-market price has seen a similar picture, dropping by similar levels over the course of the month to close down by £12 at £83/tonne. Lifting of the 2011 crop is now all but complete in the UK although some English growers are awaiting rain to assist with extracting the remaining crop, whilst the Scots are having the opposite problem.
Mild temperatures in the south are not assisting with ambient storage, leading to expectations that higher than average levels of crop will be moved early. Those with cold storage are keeping stores sealed, which could still lead to a late-season glut – volatility remains.
By late October: King Edward prices were down to between £100 and £145/tonne for grade one. Desiree prices remained steady at £100 to £130/tonne for grade one; whilst Estima prices were back even further to between £60 and £75/tonne for grade one. Maris Piper prices were down further to between £90 and £120/tonne for grade one.

B. Livestock

Steer prices continued the trend of improvement overall, dropping back initially with a late recovery putting most of the price gain in the latter part of the month. The average price closed at a peak of 184p/kg, up 5p/kg (2.8 per cent) above late September and 40p/kg (28 per cent) above the price a year ago. The average heifer price, by comparison, held relatively steady and, whilst it did improve near the end of the month, it did not benefit to the same extent as the steer price. By the end of October the premium over steers had dropped to just below 1p/kg, giving an average price of 185p/kg lw, 33p/kg above prices in late October 2010. Average dairy cow prices bounced back this month, to a closing position of £1,419 (£1,177 a year earlier)
Finished lamb prices ended almost six months of sustained weakening this month, gaining 7p/kg lw (4 per cent). A price-hike now is in line with the seasonal trend as buyers start to turn their attention to the lead up to the Christmas period. By the end of October the average price stood at 173p/kg lw; 14p/kg above the price a year earlier
The average pig price made a bid for recovery this month, gaining a couple of tenths of a penny per kg over the course of October in a period when historically the price would be dropping, thereby increasing its premium over the price a year earlier. The average price by the end of October was 145p/kg lw, 7p/kg above the average in October 2010
The average UK farmgate milk price for August (reported in October) was 0.34ppl above the July average of 27.20 ppl; a record-breaking level. The July average of 27.54 ppl is 11.5 per cent above the average price a year earlier. Milk quota prices have fallen back this month; the average price for clean 4 per cent butterfat holdings at the end of October stood at 0.38ppl, whilst leased quota (also 4 per cent butterfat) remained static at 0.07ppl.

Other crop news

UK wheat production in 2011 is estimated to be 14.67 tonnes, down 1.5 per cent on the 5 year average with plantings up 3.9 per cent. Yield is estimated to be 3 tonnes per acre, down 5 per cent on the 5 year average.
AHDB has recorded 2011 UK oilseed rape production as being 2.62 million tonnes, up 12 per cent on 2010, with average yields up from 1.2 tonnes per acre to 1.4-1.5 tonnes per acre. This suggests an exportable surplus of 700,000 tonnes.
Spring barley production is estimated at 3.23m tonnes, up 3.7 per cent on the 5 year average with plantings up 3.8 per cent. Average yield is estimated at 2.1 tonnes per acre in line with the 5 year average.
Winter barley production is estimated at 2.08m tonnes, down 18.9 per cent on the 5 year average with plantings down 10.1 per cent. Average yield is estimated at 2.3 tonnes per acre, down 9.6 per cent on the 5 year average.
HGCA trials conducted near Newmarket have shown in 5 out of the last 6 years there have been average yield increases of 26 per cent in wheat from direct drilled crops compared to conventionally drilled crops.
Openfield has announced a new contract paying a £30 per tonne premium for Zircon and Heroldo white wheat varieties used in Weetabix and Morning Foods breakfast cereals.
Aphid monitoring by Rothamsted Research has identified high numbers of barley yellow dwarf virus vector bird cherry-oat aphids throughout the country while the peach potato aphid has also been trapped.
Rothamsted Research is predicting an average year for phoma infection in UK oilseed rape crops but the risk is higher in the north and west where disease thresholds for spray treatments have already been reached.
HGCA’s autumn wheat bulb fly survey has reported infestation levels lower than the high levels of 2010.
Researchers at the University of Nottingham in association with the University of California have identified the molecular mechanism plants use to sense low oxygen levels which could lead to the production of high-yielding, flood-tolerant fresh produce crops.
Marshalls, Staples and Kettle Produce have all grown the new Beneforté broccoli for Marks & Spencer. The new variety contains up to three times as much plant nutrient glucoraphanin as other varieties. The nutrient produces a group of compounds which induce antioxidant enzymes and act as “blocking agents” to modify enzymes to detoxify carcinogenic substances before they cause DNA damage.
A super sweet French onion, known as Sweet Cevenne or Oakley, has been grown in Essex by George Thompson Ltd. Prior to lifting the onion has a brix level of 7.6, exceeding that of a Cox apple.
Freshpeel Produce, which processes around 5,000 tonnes of onions a year, has bought a 3,000 square metre food factory in Wisbech from Greenvale Foods to expand production.
Produce World IFP, based in Ely, has achieved A* status after a surprise audit by the British Retail Consortium. Only 1 per cent of all businesses which use BRC accreditation achieve A* status.
The Kentish Cobnuts Association is seeking protected geographical status for its nuts as is the Lea Valley Growers Association for its cucumbers.
The Concept Pear Orchard, developed with Sainsbury’s by Chingford Fruit in partnership with East Malling Limited, has yielded 22 tonnes from a single hectare in its second harvest with the fruit at 97-98 per cent Class 1. Traditional pear orchards produce an average of 14 tonnes per hectare at 78-80 per cent Class 1.
A study at King’s College London Dental Institute has suggested that people who eat apples are 3.7 times more likely to have damage to their dentine – the main supporting structure of the tooth – than those who do not.
A study conducted by Wageningen University of Holland has suggested that eating one apple a day reduces stroke risk by more than 50 per cent.
English wine growers are reporting reduced yields but grapes possessing a concentration of fruit which should produce high quality wine.
Ridgeview Wine Estate has won the Best Bottle Fermented Sparkling Wine trophy in the 2011 International Wine & Spirit Competition.
Somerset Cider Brandy has been awarded protected geographical indication status.

Other livestock news

Rabobank has forecast the EU sow herd will fall by 7 per cent, representing 2.1 million tonnes of pigmeat per annum, as a result on the ban on the use of sow stalls from 2013.
Defra is planning to reduce the compensation payable to farmers whose TB tests are more than 60 days overdue. Compensation will also be reduced to farmers who fail to present cattle passports within a specified period.
Scottish herds will now be exempt from four-yearly routine testing for bovine TB provided they meet certain criteria: herds of fewer than 20 cattle with no more than one consignment of cattle moved from a high-risk area in the previous 4 years; herds where 25 per cent or more of the stock are slaughtered annually and with no more than one consignment of cattle moved from a high-risk area in the previous 4 years; herds where more than 40 per cent of the stock is slaughtered annually.
The Eblex “Beef and Lamb Watch” survey undertaken in August reported 83 per cent of chiller packs having been produced in Great Britain, the highest level since the survey started 3 years ago. 56 per cent of beef and 65 per cent of lamb packs carried the Red Tractor logo.
Defra has announced it will introduce a computerised sheep database and will shortly launch a tender process.
Following criticism of its management, the National Beef Association has established a review committee to investigate its management structure.
Cattle slaughter numbers in Brazil have fallen by 9 per cent from 2006/07 to 28.8 millions in 2010/11.
Irish-owned Dunbia has bought the pigmeat plant owned by Heathfield Foods at Crewe.
Irish food group ABP has bought the RWM Food Group beef and lamb processing facilities in Langport, Somerset and Yetminster, Dorset.
Dairy Crest has added 0.7ppl to its Davidstow milk for cheese producers giving a standard litre price of 29.01ppl.
Milk Link has increased its standard litre price by 0.5pl to 28.5ppl.
Austrian yoghurt and short life dairy product manufacturer Nom is to expand production at its Telford site by at least doubling the size of its dairy.
Fylde Dairies has entered administration.
Rabobank has published “Crossroad for Growth – The International Poultry Sector Towards 2020”. It forecasts poultry as the “winning protein” in the next decade as the world population expands and incomes rise. It expects a demand for 30 per cent growth.
A report commissioned by the British Egg Industry Council and compiled by the European Food and Farming Partnerships has revealed that more than a third of EU cage egg production will not comply with rules which come into force in January.

Inputs/Supply businesses

Prices have stalled as demand for fertilizer has fallen with UK AN34.5 per cent at £345- £350 per tonne; imported AN at £315-£320 per tonne; 20:10:10 at £325 per tonne; 25:5:5 at £320 per tonne. However, demand is expected to be strong in the spring of 2012.
BASF has received approval for the use of Adexar, a fungicide for use on wheat, barley, oats, rye and triticale.
Syngenta has announced the forthcoming availability of foliar insecticide emamectin to fruit growers and thereafter to brassica growers for the control of caterpillars.

Marketing

Sainsbury’s 20 by 20 Sustainability Plan includes a pledge to double the volume of British Food it sells by 2020. It also expects its suppliers to be “leaders in meeting or exceeding our social and environmental standards” and stated that suppliers would have to work towards a 50 per cent reduction in carbon emissions.
Compassion in World Farming has formally complained to the Advertising Standards Authority in response to British Pig Executive’s “Make the Pork Promise” poster campaign on the grounds that the claim that “Red Tractor pork is high welfare pork” is “untrue and misleading”.
The Institute of Grocery Distribution has reported the number of shoppers buying RSPCA Freedom Food products as having double over the past 4 years.
The Potato Council has published “Potatoes: A Fresh Outlook”. The report claims that 80 per cent of shoppers want more information on varieties and usage and the majority care more about value than price.
The European Commission is to provide €2.99m to support the We Care, You Enjoy promotional campaign devised by Proexport and Hortyfruta, representing growers in Murcia and Andalusia, to increase consumption of tomatoes, capsicum, cucumbers, lettuce and broccoli from the two Spanish regions in the UK, Germany and Austria.
The Co-operative Group is to introduce Quick Response codes on fresh produce packaging which will allow customers with smart phones to scan the codes and learn about the background of the food, its growers and recipes.
The World Fruit & Vegetable Expo, due to take place in London this month, has been cancelled due to lack of support.

Miscellaneous

The European Commission has announced proposals which would require farm quad bikes to reach full road safety specifications including fitting a rear differential; having a reduced wheel base; limited engine power; noise and emission controls; electronic systems designed for road traffic.
Defra has acknowledged that only 3 per cent of food supplied to Government by caterers has met expected environmental standards, missing the target of 10 per cent.
Huw Irranca-Davies has replaced Willie Bain as Shadow Food and Farming Minister while Fiona O’Donnell becomes Shadow Environment and Fisheries Minister.
Lord Plumb has been appointed President of Farming and Countryside Education.
A farming partnership in Cupar, Fife, has been fined £112,500 after a worker died when he was crushed between the rollers of a potato harvester.
Sir Hans Sloane, an experimental chocolatier, has created a “hay-flavoured” chocolate.