Monthly farming update

Our renowned Monthly Farming Update was started by Prof John Nix and is our running commentary on the industry. Offering the latest news and unique insights on the rural and farming sectors, updated on a monthly basis, the publication has a wide readership amongst farmers and professionals. Now available online as a free resource or via snail mail by request.

September 2019


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+ Policy issues

1 Defra has issued a call for evidence to support the creation of the National Food Strategy. The consultation closes on 25 October. The terms of reference for the independent review, led by Henry Dimbleby, have been published.

1 Defra has published ‘Farming is changing – here’s what you need to know.’ It includes:

• the phasing out of Direct Payments between 2021 and 2027

• in the first year, those in payment band up to £30,000 will see a maximum reduction of 5 per cent; £30,000 to £50,000 a maximum reduction of 10 per cent; £50,000 to £150,000 a maximum reduction of 20 per cent; and those in payment band over £150,000 a maximum reduction of 25 per cent

• direct payments will be ‘delinked’ from the requirement to farm the land, payments will be made whether or not the recipient chooses to farm the land

• a lump sum may be offered in place of future direct payments

• all rural development projects starting before the end of 2020 will be fully funded for the lifetime of the agreement

• the producer organisation system will be replaced

• the environmental land management scheme will start in 2024 and will gradually replace the countryside stewardship scheme

• funding for the animal welfare enhancements will be made available

2 The fourth national round of the Countryside Stewardship Facilitation Fund has opened for applications and will close on 4 October. £2.5 millions is available to groups of farmers and landowners who are seeking to deliver large-scale environment improvement in their area over the next three years.

1 The Transforming Food Production Challenge has made grants to four projects featuring robotics for soft fruit. Berry Gardens Growers and the University of Lincoln have been awarded £1.2 millions to develop a commercial system of autonomous multi-task robots to undertake a variety of jobs on strawberry crops; the same entities have received £105,000 towards a feasibility study to develop an autonomous robotic blueberry picker; and projects led by Fieldwork Robotics at the University of Plymouth and a combination of Dogtooth Technologies, Driscoll’s and Hugh Lowe Farms have each been awarded £500,000 to work on robotic raspberry harvesters.

2 Natural England has reported that the 2019 breeding season has been successful for the hen harrier. A total of 15 nests produced 15 successful breeding pairs rearing 47 chicks.

3 The Transforming Food Production Challenge has awarded grants to three projects focused on improving yields or quality in soft fruit. Berry Gardens has been granted £500,000 to understand the environmental factors which control the productivity of cherry trees and blueberry bushes; S&A Produce has been granted £700,000 to develop automated technology incorporating ‘machine vision’ systems; and JD Cooling Systems has been awarded £311,000 to generate a mobile in-field cooling rig for strawberries and raspberries.

4 An outbreak of American Foulbrood has been confirmed in an apiary near Pitlochry.

5 Garford Farm Machinery has been granted £700,000 by the Transforming Food Production Challenge to design robotic weeding machinery for glasshouse and polytunnel growers.

6 The Prince’s Countryside Fund has awarded £20,000 to Just Farmers to cover the cost of media coaching for 48 farmers to bridge the disconnect between farmers and the mainstream media.

7 The Welsh Government has granted £47,000 to the DPJ Foundation to help raise awareness of well-being in the agricultural community.

1 The first estimate of Total Income from Farming for the 2017 calendar year for England and the English regions has been published. TIFF increased by 41 per cent to £4,077 millions with an increase of 12 per cent in gross output to £19,942 millions, a 14 per cent increase in crop output, a 10 per cent increase in the output of livestock for meat and a 22 per cent increase in the output of livestock products. The overall value of crops increased to £8,166 millions, accounting for 44 per cent of all agricultural output; the value of wheat increased by 23 per cent to £1,835 millions, barley increased by 26 per cent to £620 millions; oilseed rape increased by 42 per cent to £713 millions; sugar beet increased by 52 per cent to £228 millions; and potatoes increased by 13 per cent to £642 millions. Output of livestock increased by 12 per cent to £9,377 millions; milk increased by 27 per cent to £2,733 millions; and livestock for meat increased by 10 per cent to £5,356 millions. The cost of intermediate consumption increased by 7 per cent to £11,643 millions, mainly driven by a 14 per cent increase in animal feed costs; energy costs increased by 11 per cent to £918 millions; fertilizer costs increased by 7 per cent to £1,013 millions; and animal feed costs increased to £3,416 millions.

2 In the year to March 2018, households in rural hamlets and isolated dwellings had the highest disposable weekly incomes at £930 on average, £189 more than the urban average. They also had the highest weekly household expenditure at £625 on average, £121 higher than urban households. These figures exclude mortgage payments. Average household expenditure as a proportion of disposable income was lowest in rural villages at 67 per cent and highest at 68 per cent in rural town and fringe and urban areas.

3 The Agricultural Price Index for June shows outputs up 2.2 per cent compared to a year earlier and up 0.4 per cent compared to May. Inputs rose by 4.2 per cent compared to a year earlier but fell by 0.3 per cent compared to May.

4 In 2017/18, the percentage of households in rural areas in relative low income was 15 per cent before housing costs and 17 per cent after housing costs, the figures for urban areas were 18 per cent and 23 per cent respectively. Figures for working-age people were 13 per cent and 16 per cent respectively in rural areas and 15 per cent and 21 per cent in urban areas. Figures where children were involved were 19 per cent and 24 per cent respectively in rural areas and 23 per cent and 31 per cent in urban areas.

5 In 2017/18, there were 545,000 businesses registered in rural areas, 24 per cent of the total in England. Those businesses employed 3.6 million people, 13 per cent of the total. Agriculture, forestry and fishing accounted for 15.2 per cent of businesses in rural areas and 3.8 per cent of all businesses in England.

6 In 2017/18 there were 2.6 additions to affordable housing stock per 1,000 households in predominantly rural areas compared to 1.7 additions in predominantly urban areas.

7 In 2017/18, the percentage of working-age people in employment was 79 per cent in rural settlements and 75 per cent in urban areas. Those economically active people who were unemployed were 2.6 per cent in rural settlements and 4.5 per cent in urban areas.

8 A Co-op Economy report has revealed that the number of farmer owned cooperatives has fallen to 434 with the number of farmer owners down 1.8 per cent.

9 In 2017/18 in predominantly rural areas there were 12,870 additions to affordable housing stock compared to 26,580 in predominantly urban areas.

+ Product prices

A Market background

1 Hyperbole are running out for the sorry state of the UK’s Brexit position, and UK politics in general. As such, Sterling continues to grow weaker and remain volatile. Forex markets saw the Pound weaker (against Dollar and Euro) than at any point in the past decade. Against the Euro, Sterling opened at 90.0p per €, fell as far as 94.0p but recovered somewhat to close in late August at 90.3p per € (0.3p weaker). Movement against the US Dollar was very similar but with less of a recovery: opening at 80.8p per $, the Pound fell to 83.2p, recovered marginally to 81.3p but fell again to close August at 82.2p per $ (1.4p weaker). Brent Crude oil prices remained at the lower end of the past decade’s parameters, closing down overall. From an opening position of $61.95, the average price fell early on and never quite recovered; peaking just above $61.10, dropping to $56.00 before closing August at $59.25 per barrel; a net reduction of $2.70 (4 per cent).

B Crops

1 The average wheat price dropped back further over the course of the month, with the progression, and in many cases completion, of the 2019 harvest in the northern hemisphere. The overall yields have been above average which, when compounded by: a net short-selling by US investment funds; improved expectations for the US maize harvest; and pressure from good Russian, Romanian and Ukrainian crops; have pushed prices down. It is only really the weak Sterling that has propped prices up and the question remains whether Sterling can recover. Further quality reports on the 2019 wheat harvest continue to erode milling premiums. LIFFE feed wheat futures fell back throughout the month as wheat harvest in southern and central Europe finished, with northern Europe all but done. In late August, deliveries for November 2019 and 2020 stood at £132/tonne (-15) and £142/tonne (-8) respectively. November 2021 deliveries opened mid-month at £153 but closed the month at £147 (-6). Oilseed prices continued to operate independently, as the previous estimate of a low UK harvest was found to be close to reality. The overall short supply of oilseeds in the EU was amplified by the weakening Sterling, leading to a healthy rise in the average price.

Average spot prices in late August (per tonne ex-farm): feed wheat £121 (-13); milling wheat £138 (-14); feed barley £110 (-6); oilseed rape £329 (+12); feed peas £177 (-22); feed beans £182 (-55).

2 The average potato price for the 2019 cropping season was first quoted this month, opening £20 lower than a year earlier; whilst the free-by price for 2019 crop opened £118 lower than a year earlier. Movement of the last tails of the 2018 crop was not of sufficient sample size to provide an average price; whilst movement of 2019 crop, which has plentiful available tonnage, was largely under contract with limited free-by movement.

By late August the average potato price had dropped £13 below its opening position of £183 per tonne, to close at £170 per tonne (£42 below the August 2018 closing average). The free-buy average opened at £178 per tonne but also dropped back to close the month at £143 per tonne (£158 below the August 2018 close). As it is still early in the season, the market is yet to settle, although the dip at the end of August is attributed to the hot weather and the August bank holiday.

2019 crop prices for grade 1 packing in late August (per tonne ex-farm) remain limited: Salad varieties, mainly Maris Peer and Gemson, were trading at between £280 and £380; Maris Piper were moving at between £100 and £190; early white varieties were trading at a far lower range of £140 and £190. Movement of red skin varieties was limited but a small sample moved at an average of £190.

C Livestock

1 Cattle prices improved for the first half of the month, but fortunes turned in the second half, seeing prices drop lower overall. The average finished steer price rose from its opening position of 180p/kg lw to peak at 185p, before falling back to 175p/kg lw where it closed (5p down in the month and 13p/kg below the closing average a year earlier). The average finished heifer price performed similarly; gaining 5p on its opening position of 194p/kg lw, before falling back to close at 191p/kg lw (3p lower and 19p below the price a year earlier). The average dairy cow price remained volatile, increasingly so; rising from its opening position of £908 per head to peak at £1,237 before falling hard again to close at £869 per head (£41 down but £58 above the average a year earlier).

2 Lamb prices fell back materially over the course of the month, for the second month in succession, as high (but reducing) numbers of animals reached market. The average new season finished lamb price (SQQ live weight) fell from its opening position of 209p/kg lw, throughout the month, to a closing position of 178p/kg lw (9p/kg below the average a year earlier).

3 The average UK all pig price (APP) improved further this month, continuing the trend from the previous two months, in line with expectation for this stage in the season. Opening at 151.6p/kg dw, the average improved evenly over the month, to close at 154.9p/kg (up 3.3p to sit 1.8p/kg below the closing average a year earlier).

4 The UK average ‘all milk’ price for May, published in July, reported a fall of a further 0.38p to an average of 27.86ppl (1.07ppl above the average in May 2018 and 0.56ppl above the rolling 5 year average of 27.30ppl). In the rankings against the ‘EU28’ farmgate milk price for May, the UK lost three places to sit 21st against a marginally weaker EU28 weighted average of 30.37ppl (down 0.10ppl in the month).

+ Other crop news

1 Details of the provisional arable crop areas in England as at 1 June have been published. The wheat area was 1.69 million hectares, up 4.5 per cent on 2018; the barley area was up 3.8 per cent with winter barley up 16 per cent to 390,000 hectares but spring barley had fallen by 5 per cent to 448,000 hectares; the oats area was up 8 per cent to 143,000 hectares; and the oilseed rape area was down 8.9 per cent to 497,000 hectares.

2 Latest estimates suggest that 2019 wheat yields are 6-8 per cent above average and production will be 15.9 - 16.2 million tonnes, the highest since 2015. Oilseed rape production is forecast, according to AHDB, at 1.64 – 1.8 million tonnes.

3 The Agricultural Price Index for June shows an increase in the output of crop products of 12 per cent compared to a year earlier and of 0.6 per cent compared to May; wheat rose by 2.5 per cent but was down 5.4 per cent on May; barley fell by 2.3 per cent and was down 2.3 per cent on May; oats rose by 29 per cent but fell 14.6 per cent on May; potatoes rose by 35.3 per cent and 3.6 per cent respectively; fresh vegetables rose by 15 per cent and 4.3 per cent respectively; and fresh fruit rose by 41 per cent but fell by 1.7 per cent compared to May.

4 In 2018 the value of home produced vegetables fell by 0.5 per cent to £1.4 billions while volumes fell by 12 per cent to 2.4 million tonnes. Field vegetables fell by 0.5 per cent to £1.5 billions while protected vegetables fell by 0.6 per cent to £331 millions. Home produced fruit rose in value by 2.2 per cent to £769 millions but volumes fell by 4.1 per cent to 719,000 tonnes.

5 Jersey Hemp has been granted a licence to harvest, process and store the hemp flower for cannabidiol extraction.

+ Other livestock news

1 Since the end of July there have been four outbreaks of African Swine Fever in Serbia, near Belgrade, and further outbreaks in large commercial holdings in Bulgaria, Poland and Romania. Belgium is disease free in domestic pigs and there has only been one reported case in wild boar in August. China, Cambodia, Laos and Vietnam have all reported further cases along with new cases in Myanmar close to the Thai border. In China, Vietnam and Mongolia almost 5 million pigs have been culled representing over 10 per cent of the total pig population of those countries.

2 The Labour Party has reiterated its commitment to ending the badger cull in England on the basis that the spread of bovine TB could be controlled ‘through different and humane methods’.

3 The Agricultural Price Index for June shows a fall in the output of animals and animal products of 4.8 per cent compared to a year earlier and 0.6 per cent compared to May; cattle and calves fell by 10 per cent and 2.6 per cent respectively; pigs rose by 1.4 per cent and 3.9 per cent respectively; sheep and lambs fell by 18.3 per cent and 6 per cent respectively; poultry fell by 11.1 per cent and 0.6 per cent respectively; milk rose by 3.7 per cent and 1 per cent respectively; and eggs fell by 0.1 per cent compared to a year earlier but were unchanged compared to May. The input of veterinary services rose by 0.5 per cent compared to a year earlier but was unchanged compared to May while animal feeding stuffs rose by 5.7 per cent and 0.4 per cent respectively.

4 The Labour Party has proposed the creation of an ‘Animal Welfare Commissioner’ to protect trade deals following Brexit.

5 In the year to May there was a fall of 4 per cent, compared to the previous year, in new herd bovine TB incidents in England with a fall of 8 per cent in the High risk area but increases of 13 per cent and 9 per cent respectively in the Edge and Low risk areas. There were falls of 39 per cent in Scotland and 2 per cent in Wales. The number of herds not officially TB free fell by 4 per cent in England with a fall of 9 per cent in the High risk area but rises of 13 per cent and 37 per cent respectively in the Edge and Low risk areas. There was a fall of 33 per cent in Scotland but a rise of 6 per cent in Wales.

6 In the three months to March, pre-movement tests in England for bovine TB led to the identification of 94 reactors out of 114,857 tests while in Wales there were 21 reactors out of 30,663 tests.

7 A new case of Equine Viral Arteritis has been confirmed in a non-thoroughbred stallion in Shropshire.

8 Milk production in July was 1,261 million litres, 1.9 per cent down on June but up 2.5 per cent on a year earlier. Average butterfat content fell 0.5 per cent on June to 3.95 per cent but was up 1.6 per cent on a year earlier. Average protein content fell to 3.29 per cent.

9 Meadow Foods has reduced its price of a standard A litre by 1.7ppl to 25ppl.

10 Freshways has reduced its price paid to producers by 2.1ppl to 25ppl.

11 During June UK dairies processed 1,217 million litres of milk, a year on year increase of 0.1 per cent compared to May but 7.6 per cent down on May itself; liquid milk production fell by 6.9 per cent compared to May; cheese production fell by 7.1 per cent; butter production fell by 15 per cent; and milk powder production fell by 1 per cent.

12 Cardigan auction market is to close as a consequence of the effects of bovine TB in the area.

13 In the three months to June, 7.9 million cases of eggs were packed in the UK, 3.3 per cent up on the same period a year earlier and 0.5 per cent up on the previous quarter; the average farm-gate price was 71p per dozen, 2 per cent up on a year earlier and 2.4 per cent up on the first quarter; and the production of egg products totalled 22,000 tonnes, 88 per cent down on a year earlier but 5.7 per cent up on the first quarter.

14 During July UK commercial layer chick placings fell by 14 per cent, compared to a year earlier, to 3.1 million chicks; broiler chick placings fell by 1.7 per cent to 101.6 million chicks; turkey chick placings fell by 3.4 per cent to 2.3 million chicks; turkey slaughterings fell by 8 per cent to 1 million birds; broiler slaughterings fell by 5.4 per cent to 100.7 million birds; and poultry meat production fell by 5 per cent to 181,770 tonnes.

15 During July, UK prime cattle slaughterings fell by 1 per cent, compared to a year earlier, to 162,000; beef and veal production fell by 0.7 per cent to 76,000 tonnes; sheep slaughterings rose by 5.7 per cent to 1.09 millions; mutton and lamb production rose by 9.9 per cent to 25,000 tonnes; pig slaughterings rose by 2.9 per cent to 909,000; and pigmeat production rose by 4.8 per cent to 79,000 tonnes.

+ Inputs / Supply business

1 Provisional estimates for UK soil nutrient balances for 2018 have been published. For nitrogen there is a surplus of 92kg/ha of managed agricultural land which is up 1 per cent on 2017 but down 17 per cent when compared to 2000. For phosphorus there is a surplus of 6.8 kg/ha of managed agricultural land which is up 10 per cent on 2017 but down 32 per cent when compared to 2000.

2 The Agricultural Price Index for June for inputs shows a fall of 0.3 per cent in seeds compared to a year earlier and 3.6 per cent compared to May; energy and lubricants rose by 5 per cent but fell 1.9 per cent on May; fertilizers rose by 7.6 per cent but fell 1.1 per cent on May; sprays rose by 15.1 per cent but were unchanged on May; vehicle maintenance costs rose by 3.1 per cent and 0.4 per cent respectively; and building maintenance costs rose by 3.3 per cent and 0.4 per cent respectively.

3 AlphaBio, manufacturer of Flipper, an innovative biological pest control product, has signed a distribution agreement with Bayer. Flipper is a bioinsecticide-acaricide obtained entirely from a by-product of extra virgin olive oil.

4 BASF has received approval for Soriale, a fungicide containing potassium phosphonate for the control of scab in apples and pears.

+ Marketing

1 In the past three months Tesco’s share of the grocery market fell by 1.6 per cent to 27 per cent, Sainsbury’s by 0.6 per cent to 15.4 per cent, Asda by 1.5 per cent to 14.9 per cent and Morrisons by 2.7 per cent to 10.1 per cent. Meanwhile Aldi rose 6.2 per cent to 8.1 per cent, Lidl rose 7.7 per cent to 5.9 per cent, the Co-op rose 0.2 per cent to 6.6 per cent and Ocado rose 12.6 per cent to 1.4 per cent.

2 IGD has suggested that the UK convenience food market will grow by £6.9 billions over the next five years to £48.2 billions.

3 Statistics from HM Revenue & Customs have intimated that 300,000 tonnes of beef, lamb and pork have been exported in the first six months of this year with a value of £711 millions.

4 In 2018 UK soft fruit exports rose by 70 per cent to £22.1 millions, mainly strawberries, raspberries and blackberries. The main markets were the Netherlands, Spain and the Republic of Ireland.

5 Marks & Spencer has agreed to sell its food products via Ocado with effect from this month.

6 BIFGA members have undertaken a survey, for the 2018 English Gala crop, for each link in the supply chain. This revealed that for production up to and including harvest growers committed 80 per cent of total time and investment, intermediaries 13 per cent and retailers 7 per cent; growers took 87 per cent of the total overall risk, intermediaries 8 per cent and retailers 5 per cent; and growers took 25 per cent of the total retail price, intermediaries 28 per cent and retailers 47 per cent.

7 Protected Geographical Status has been granted to Ayrshire New Potatoes/Ayrshire Earlies.

8 The Retail Sales Index Scotland has reported an increase in retail sales in Scotland of 0.9 per cent in the three months to June.

9 An application has been made for Protected Geographical Status for Iveagh Rapeseed Oil.

10 IndexBox has reported that the global tomato market has increased by an average of 3.1 per cent in the past eleven years and by 6.5 per cent in 2018.

+ Miscellaneous

1 In 2018/19 there were 20.2 cases of violence against the person per 1,000 population in predominantly rural areas compared to 29.5 cases in predominantly urban areas. The number of robberies was lowest in mainly rural areas at 0.3 cases per 1,000 population and highest at 2.8 cases in urban areas with major conurbations. The lowest rate of domestic burglary offences was 5.9 cases per 1,000 population in mainly rural areas, the highest was 16.2 cases in urban areas with major conurbations. Vehicle offences were lowest in mainly rural areas at 3.6 cases per 1,000 population and highest at 11.5 cases in urban areas with major conurbations.

2 NFU Mutual has reported that the cost of rural crime rose by £5.4 millions in 2018 to £50 millions. Agricultural vehicle theft rose by 26 per cent, quad bike theft by 13 per cent and livestock by 4 per cent.

3 In 2017/18 there were 63,800 tourist related businesses in rural areas, representing 11 per cent of all rural businesses, compared to 254,000 tourist related businesses in urban areas representing 12 per cent of the total. Tourism employment in rural areas totalled 600,000, representing 14 per cent of all rural employment, compared to 2.4 millions in urban areas representing 11 per cent of the total.

4 The Welsh Government has appointed two ambassadors to promote the work of the Wales Farm Safety Partnership.

+ Postscripts

A catholic elementary school test

Kids were asked questions about the old and new testaments. The following statements about the bible were written by children.

1. In the first book of the bible, Guinessis, god got tired of creating the world so he took the Sabbath off.

2. Adam and Eve were created from an appletree. Noah’s wife was Joan of Ark. Noah built and ark and the animals came on in pears.

3. Lots wife was a pillar of salt during the day, but a ball of fire during the night.

4. The Jews were a proud people and throughout history they had trouble with unsympathetic genitals.

5. Sampson was a strongman who let himself be led astray by a jezebel like Delilah.

6. Samson slayed the Philistines with the axe of the Apostles.

7. Moses led the Jews to the Red Sea where they made unleavened bread, which is bread without any ingredients.

8. The Egyptians were all drowned in the dessert. Afterwards, Moses went up to Mount Cyanide to get the Ten Commandments.

9. The First Commandments was when Eve told Adam to eat the apple.

10. The Seventh Commandment is thou shalt not admit adultery.

11. Moses died before he ever reached Canada then Joshua led the Hebrews in the Battle of Geritol.

12. The greatest miricle in the bible is when Joshua told his son to stand still and he obeyed him.

+ Business Box

The couples’ Brexit!

A candle-lit dinner, a bottle of quality English wine and a vase of roses or freesias in the centre of the table. The eyes meet and glaze over ‘darling, will you marry me?’.

Well that’s how it used to be but, unless you’re a pair of courting wood pigeons sitting on a power cable, romance seems to be a thing of the past and marriage is slowly following suit.

The number of cohabiting couples has grown by 25 per cent in the past 10 years to 3.4 million families. This still only represents 18 per cent of the UK’s 19 million families but if it carries on at this rate wedding venues will be going out of business at a faster rate than high street outlets.

Marriages still represent two-thirds of all families but 10 years ago it was over 70 per cent. That’s a lot of people.

Common law ‘marriage’ is not recognised in England, Wales or Northern Ireland. Although Scotland is more ‘progressive’, its laws still do not provide the same matrimonial rights as married persons have. Marriage and civil partnership grant legal rights and responsibilities, even having a child outside a recognised partnership makes little difference.

Divorce is normally a messy business, just look at the UK and the EU! Whatever your relationship, and it may not be very romantic, agree the terms of your parting when you agree the terms of your co-habitation. If nothing else, there will be more left to share between you as the lawyers will be out of pocket!

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