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.


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+ Policy issues

1 The Government has published a consultation document on mandating biodiversity net gain in developments to ensure habitats are protected. Developers would be required to deliver a biodiversity net gain when developing land for housing or commercial uses. Habitat assessments would be required before planning permission is sought. If habitat improvement is not possible, developers would be charged a levy to fund habitat creation or improvement elsewhere. The consultation closes on 10 February.

2 Defra has published a bovine TB strategy review. The review calls on the livestock industry and individual farmers to take more responsibility to control the spread of the disease and suggests a new body to take over control operations from the Animal and Plant Health Authority, Natural England and local authorities. The review reports that the use of the BCG vaccine is the only non-lethal viable option at present.

1 The Rural Payments Agency has published details of the 2018 Basic Payment. The value for a Non-Severely Disadvantaged Area is €181.39; for a Severely Disadvantaged Area €180.00; and for Severely Disadvantaged Area moorland €49.09. The Greening payment rates are €78.13, €77.53 and €21.14 respectively. The exchange rate is €1 : £0.89281. The Financial Discipline Mechanism reduction rate, for payments over £2,000, is 1.411917.

2 The Welsh Government has announced that the Basic Payment Scheme will remain unchanged in 2020 to assist with the transition to a new Land Management Programme.

3 The Countryside Stewardship Historic buildings restoration grant manual has been updated.

1 UK Climate Projections 2018 suggest that summer temperatures could increase by 5.4C by 2070 while winter temperatures could increase by 4.2C; the chance of a summer as hot as 2018 will be 50 per cent by 2050; sea levels in London will increase by 1.15 metres by 2100; and average summer rainfall could decrease by 47 per cent by 2070 but winter precipitation could increase by 35 per cent.

2 Data has been published concerning organic farming in 2017. The organically farmed area was 517,400 acres, up 1.9 per cent on 2016, the increase in England was 1.3 per cent. Of the total, 64 per cent was accounted for by permanent grassland while 7 per cent was used to grow cereals. Of the total UK livestock population, 2.9 per cent is reared organically. The number of organic farmers has risen by 3.5 per cent to 6,600.

3 Details have been published of wild bird populations in England in 2017. The all-species index was 2 per cent lower than in 1970; the farmland bird index was less than half its 1970 value although most of the fall occurred in the late 1970s and early 1980s; the woodland bird index was 27 per cent down on the 1970 value; the water and wetland bird index was up 7 per cent on the 1975 value; the seabird index was 22 per cent above the 1986 value; and the wintering waterbird index was 98 per cent above the 1976 value although there has been a decline since the peak in the late 1990s. In farmland species, the turtle dove has declined by 98 per cent, the tree sparrow by 95 per cent, the grey partridge by 92 per cent, the corn bunting by 89 per cent and the starling by 88 per cent. Conversely, the goldfinch has increased by 160 per cent and the stock dove by 109 per cent.

4 With effect from 26 November, olive trees have been added to the list of tree species included in the plant health statutory notification scheme for imports from the EU as a protective measure against the plant disease Xylella.

5 Defra has published an updated code of practice on waste duty of care requirements. The duty of care applies to anyone who imports, produces, carries, keeps, treats, disposes of, or are a dealer or broker that has control of, controlled waste. Occupiers of domestic property disposing of household waste from that property are exempt.

6 An independent review into waste crime, ordered by Defra, has published its findings. Recommendations include the establishment of a Joint Unit for Waste Crime; mandatory electronic tracking of waste; the introduction of a national database of registered waste brokers; and the Environment Agency should be granted full access to relevant police databases.

7 The number of reported fly-tipping incidents in England in 2017/18 fell by 1.3 per cent to 997,553. Of the total, 46 per cent occurred on highways, 16 per cent on land owned by local authorities, 16 per cent on footpaths or bridleways and 0.3 per cent on agricultural land. There were 2,243 prosecutions of which 2,186 were successful.

8 In association with the environmental charity Keep Britain Tidy, Defra has launched a new campaign to crack down on littering in England. Campaign partners include Mars Wrigley Confectionary, Greggs, McDonald’s, PepsiCo UK and Network Rail.

9 As part of the Government’s 2019 Year of Green Action, over 50 young people from around the UK have been named as environment ambassadors.

10 Haygrove, the soft fruit grower, has joined forces with RPC bpi Horticulture to create a UK-wide recycling scheme for disused crop tunnel covers.

11 Defra has called for views on the National Policy Statement for Water Resources Infrastructure. The Statement will specifically apply to reservoirs, water transfer and desalination projects in England. The consultation period closes on 31 January.

12 The Welsh Government is to introduce regulations covering the whole of the country to protect water quality from agricultural pollution. The regulations will include nutrient management planning; sustainable fertilizer applications linked to the requirement of the crop; protection of water from pollution related to when, where and how fertilizers are spread; and manure storage standards.

13 FEC Energy and the Agriculture and Horticulture Development Board have agreed to broaden the GrowSave energy-saving advice scheme to UK soft fruit grown under protection.

14 The latest sighting of an Asian Hornet was in Dungeness, Kent on 14 October.

15 The Welsh Government is to invest £300,000 in a 2-year pilot study to create 30 apprenticeships in the forestry sector.

16 Oliver Kay, the Bolton-based wholesaler, is to supply its growers with compost made from surplus fresh produce.

17 Defra has announced funding of £1.5 millions to develop a bespoke local Skills Access Hub covering Cornwall and the Isles of Scilly. Applications must be submitted by

19 February with the project completed within 3½ years.

18 The Scottish Government has announced a further 11 grants totalling £363,000 to help crofters build or improve their homes.

1 The second estimate of UK Total Income from Farming for 2017 has been published. TIFF rose by £1,744 millions, or 45 per cent in real terms, to £5,711 millions. The total contribution of agriculture to the economy rose by £1,756 millions, or 21 per cent, to £10,285 millions. Overall output rose by 10 per cent with increases of 11 per cent in crop output, 7 per cent in livestock meat and 25 per cent in livestock products, mainly milk. Higher prices for animal feed, energy and fertilizer drove costs up by 4.2 per cent. Basic Payments rose by 3 per cent due to the weakening of the £. The annual work unit of entrepreneurial labour, that is farmers and other unpaid labour, rose by 44 per cent in real terms to £29,466.

2 Initial survey results of Farm Business Income in 2017/18 have been published. The average Basic Payment was £31,700, 13 per cent up on the previous year. The average income of cereals farms rose by 49 per cent while the income of general cropping farms rose by 33 per cent. Average income of dairy farms more than doubled to £119,700 while lowland grazing livestock farms income rose by 36 per cent although farms in Less Favoured Areas only showed a 5 per cent increase. The incomes of specialist pig farms almost halved.

3 Statutory Instruments have been passed to enable programmes currently funded by the European Agricultural Fund for Rural Development and the European Maritime Fisheries Fund to continue to receive funding for the 2014-2020 period following exit from the EU.

4 The second estimate of total factor productivity for 2017 has been published. This is the measurement of how efficiently inputs are converted into outputs. Overall productivity rose by 2.7 per cent; outputs rose by 3.4 per cent with a 6.2 per cent increase in all crops, a 0.8 per cent increase in livestock meat outputs and a 4.5 per cent increase in livestock product outputs. The volume of inputs rose by 0.7 per cent. Within outputs, the biggest movers were industrial crops, up 25.7 per cent, sugar beet, up 56.8 per cent, and potatoes, up 15.6 per cent. Within inputs there were falls of 9.7 per cent in fertilizer and 7 per cent in buildings maintenance.

5 In 2017/18 there were 2.6 additions to affordable housing stock per 1,000 households in predominantly rural areas compared with 1.7 additions per 1,000 households in predominantly urban areas. The absolute figures were 12,870 and 26, 580 respectively.

6 The Agricultural Price Index for all outputs in September rose by 2.7 per cent compared to August and by 7.4 per cent compared to a year earlier. The index for inputs fell by 0.1 per cent compared to August but was up 6.6 per cent on a year earlier.

7 The percentage of working age people in employment in 2017 was 74 per cent in urban settlements and 79 per cent in rural settlements. The percentage of economically active people aged 16 and over who were unemployed was 4.8 per cent in urban settlements and 2.7 per cent in rural settlements. The percentage of working age people not available for work or not seeking work was 22 per cent in urban settlements and 19 per cent in rural settlements.

+ Product prices

A Market background

1 Sterling closed marginally up against the Euro, having had a volatile month. Opening at 89.1p per €, the first half of the month saw a swift gain of 1.6 per cent, followed by small improvements thereafter to peak at 86.6p. However, a mid-month adjustment saw the Pound lose 1.6p in a matter of hours and spend the rest of the month close to that new level, eventually closing at 88.7p per € (0.4p up). Sterling performed similarly against the Dollar: initially strengthening from an opening rate of 78.5p per $ to peak at 75.9p before spending the remainder of the month losing value to close at 78.4p per $ (0.1p up). Brent Crude oil prices continued to fall this month, dropping by a further 23 per cent, again with limited volatility, from an opening position of $76.77 per barrel to a low of just above $58. A late recovery brought about a small rise, leading to a month close of $59.47 per barrel.

B Crops

1 Average wheat prices dipped at the start of the month but recovered in the latter half. The early weakness was largely due to US reports of an improved world maize stock position, particularly in China; uplifted harvest expectations in Brazil and good planting conditions in Argentina; all amplified by the strengthening Pound. The latter improvements were driven locally by the weakening Pound following various ‘Brexit deal resignations’ and reports of very poor French conditions for wheat planting. LIFFE feed wheat futures were generally weaker with prices down across the board but, having been far lower mid-month, prices were improving as the end of the month approached: in late November, deliveries for November 2019 and 2020 stood at £158/tonne (-2) and £157/tonne (-3) respectively. Oilseed prices remained relatively steady albeit marginally down as the current low demand outweighed the confirmations of lower 2019/20 plantings of oilseeds in Europe.

Average spot prices in late November (per tonne ex-farm): feed wheat £164 (-1); milling wheat £174 (-); feed barley £163 (-); oilseed rape £317 (-3); feed peas £212 (+2); feed beans £217 (+2).

2 The average potato price bounced back with reasonable vigour as harvest drew to a close and the market adjusted to the yields and quality available. Conditions have remained favourable for ambient storage, with some reports of secondary growth and a few instances of rot. By late November the average potato price had gained £32 from its late October position of £173 per tonne, to close at £205 per tonne (£71 above the November 2017 close). The free-buy average was somewhat static by comparison; from a starting position of £253 per tonne it dropped to £247, rose to £257 but eventually closed the month £1 up at £254 per tonne, to sit £164 above the November 2017 close.

2018 crop prices for grade 1 in late November (per tonne ex-farm): Salad varieties had dropped at the top end to between £300 and £380; Maris Piper had improved further to between £300 and £390; King Edwards were holding at between £280 and £425; Estima and other white varieties had spread to between £220 and £300, whilst red skin varieties (Mozart and Camel) were steady at between £230 and £250.

C Livestock

1 Cattle prices were broadly positive this month. The average finished steer price, from its opening position of 181p/kg lw, gained steadily for the majority of the month to peak at 188p and, after a material mid-month fall to 181p, recovered vigorously to close at 191p/kg lw (10p up but 6p/kg below the closing average a year earlier). The average finished heifer price was generally flat for most of the month but closed with a strong finish: from an opening position of 199p/kg lw, the average price fluctuated by less than a penny until a ‘final flourish’ saw the average close at 207p/kg lw (8p up and 4p below the price a year earlier). The average dairy cow price was less buoyant this month, dropping from its opening position of £1,161 per head to spend the majority of the month below £1,000 per head; closing at £911 (£250 below the previous month and £305 below the average a year earlier).

2 Lamb prices turned a corner and began to improve this month. The average new season finished lamb price (SQQ live weight) gained steadily throughout the month from its opening position of 165p/kg lw to a close of 176p/kg lw (11p overall to sit 4p/kg above the average a year earlier).

3 The average UK all pig price (APP) flitted from small increases to decreases over the course of the month, with an overall downward trend. Opening at 149.4p/kg dw and dropping to 147.5p/kg where it closed (down 1.9 p/kg and sitting 9.1p/kg below the closing average a year earlier).

4 The UK average ‘all milk’ price for September, published in November, reported a further material increase (0.84p) giving an average of 30.57ppl (0.12ppl above the average in September 2017 and 2.77ppl above the rolling 5 year average of 27.80ppl). The UK’s ranking against the ‘EU28’ farmgate milk price for September placed the UK 13th (one place higher) against an improved EU28 weighted average of 32.57ppl (up 1.85ppl in the month).

+ Other crop news

1 Scientists at Rothamsted Research have warned that the forthcoming neonicotinoid ban will result in crops being subject to barley yellow dwarf virus leading to lower yields as disease-resistant varieties are at least a decade away from being developed.

2 The AHDB autumn light leaf spot preliminary forecast has indicated the disease risk to winter oilseed rape is relatively low.

3 The International Grains Council has forecast an increase in wheat plantings in 2019 for the first time in 4 years with the main increases being in the US, Russia and the EU.

4 The Agricultural Price Index for outputs of all crop products in September rose by 7.1 per cent compared to August and by 19 per cent compared to a year earlier; the index for cereals rose by 4.5 per cent and 24 per cent respectively; the index for potatoes fell by 8.6 per cent compared to August but was up 36 per cent on a year earlier; the index for fresh fruit was up 46 per cent and 24 per cent respectively; the index for fresh vegetables was up 5.2 per cent and 26 per cent respectively; and the index for forage plants was up 1.8 per cent and 19 per cent respectively.

5 The revised estimate for the 2018 potato planted area is 117,300 hectares, down 4.4 per cent on the 2017 area.

6 The UK onion crop is expected to be down by 40 per cent this year.

7 Global Plant Genetics has launched Vittorio, a white asparagus hybrid bred in the north of Italy.

8 In 2017, the value of home produced vegetables increased by 3.3 per cent to £1.5 billions with a 4.9 per cent increase in volume to 2.7 million tonnes. The values of field vegetables increased by 4.2 per cent to £1.1 billions while the value of protected vegetables increased by 0.8 per cent to £356 millions. Home produced fruit rose by 9.2 per cent to £765 millions but volume fell by 5.1 per cent to 743,000 tonnes. Production of cherries increased by 240 per cent to £24 millions while raspberries increased by 12 per cent to £136 millions.

9 The European Commission’s Agriculture and Rural Development Department has revealed that European fruit and vegetable farms increased output by 15 per cent between 2014 and 2015 making the sector the fastest growing in European agriculture while income per labour unit increased by 12 per cent.

10 The James Hutton Institute has developed two new primocane raspberry varieties, one early and one late-season.

11 The 2019 BIFGA Technical Day is to be held on 19 January at Dale Hill Conference Centre, Ticehurst, East Sussex.

+ Other livestock news

1 Defra has published the report of Exercise Blackthorn, the UK’s national Foot and Mouth Disease exercise conducted over a period of 10 months. The purpose was to test the 4 UK Governments’ contingency plans for a UK-wide, medium to large outbreak. It tested the new Animal and Plant Health Agency’s outbreak model, response structures, disease confirmation and control processes, internal communications, cross-government collaboration, engagement with stakeholders and outbreak recovery.

2 In the year to August, the number of bovine TB new herd incidents fell by 7 per cent with falls of 9 per cent in the High risk area and 2 per cent in the Low risk area but a rise of 5 per cent in the Edge area. There was a fall of 3 per cent in Wales but a rise of 16 per cent in Scotland. The number of herds not officially TB free in England fell by 5 per cent with a fall of 9 per cent in the High risk area but a rise of 12 per cent in the Low risk area. There was a fall of 2 per cent in Wales but a rise of 11 per cent in Scotland.

3 Details have been published of the number of pedigree farm animals in the UK in 2017. In cattle the greatest percentage increases in the female population were in the Vaynol breed, up 50 per cent, the Whitebred Shorthorn, up 28 per cent, and the belted Galloway, up 7 per cent. Significant reductions were seen in the Highland and South Devon breeds with the Highland breed getting very close to being a “Breed at Risk” which befell the Galloway breed in the year. In sheep, the Llanewenog breed rose by 17 per cent, the Castlemilk Moorit, up 17 per cent, and the Hill Radnor, up 15 per cent. Steepest falls affected the Norfolk Horn, down 8 per cent, the Lonk, down 7 per cent, the Bluefaced Leicester, down 7 per cent, and the Soay, down 6 per cent. In pigs there were increases of 15 per cent in the Large White and 12 per cent in the Tamworth.

4 The Animal Health and Welfare Framework has been published. It is designed to help local authorities work with communities to safeguard the farming industry, help prevent animal disease, protect public health and promote the welfare of animals.

5 In the 3 months to June, pre-movement bovine TB testing in England identified 93 reactors out of 138,632 tests completed on individual animals; pre-movement testing in Wales identified 28 reactors out of 40,249 completed tests; and post-movement testing in the Low Risk Area of England identified 4 reactors out of 14,242 completed tests.

6 The EU has agreed to compensate farmers fully for livestock damage caused by ‘large carnivores’ and also reimburse farmers for investing in preventative measures.

7 In October, UK prime cattle slaughterings rose by 6.1 per cent, compared to a year earlier, to 183,000 head; beef and veal production rose by 5.6 per cent to 86,000 tonnes; sheep slaughterings fell by 0.5 per cent to 1,269,000 head; mutton and lamb production rose by 2.2 per cent to 28,000 tonnes; pig slaughterings rose by 4 per cent to 963,000 head; and pigmeat production rose by 2.7 per cent to 84,000 tonnes.

8 Defra has updated the details of recognised breed societies for bovine, ovine, caprine and porcine species.

9 The Agricultural Price Index for outputs of animals and animal products in September rose by 1.8 per cent compared to August and by 19 per cent compared to a year earlier; the index for inputs of straight feeding stuffs rose by 2.6 per cent and 13 per cent respectively; and the index for veterinary services was unchanged compared to August but fell 13 per cent compared to a year earlier.

10 Milk production in October rose by 3.7 per cent to 1,196 million litres, an increase of 0.4 per cent on a year earlier.

11 Arla has reduced the price of a standard litre by 0.89ppl to 31.57ppl.

12 In September, UK dairies processed 1,104 million litres of milk, 3 per cent down on August but 0.1 per cent up on a year earlier. Liquid milk production fell by 3.5 per cent, cheese production by 5.3 per cent, butter production by 2.3 per cent and milk powder production by 16.5 per cent.

13 Meadow Foods has reduced the price of a standard A litre price by 1ppl to 28.5ppl.

14 Average butterfat in October rose by 2 per cent to 4.17 per cent, 0.3 per cent lower than a year earlier, while average protein rose to 3.44 per cent, up from 3.40 per cent in September and from 3.39 per cent a year earlier.

15 Muller is to offer a premium of 0.5ppl to those producers committing to health and welfare standards.

16 Defra has published updated guidance for sheep and goat keepers. Such persons, that is the keepers rather than the owners, must maintain a register of animals for each holding to record new or replacement identifiers, movements on and off each holding, deaths and an annual inventory on 1 December each year.

17 Further outbreaks of African Swine Fever have been reported in Lithuania, Moldova, Poland, Romania, Russia and the Ukraine and the first reported case in Bulgaria.

18 Bulgaria has reported 24 outbreaks of HPAI H5N8 with 9 occurring in October. In one case a commercial operation housing 130,000 birds has been affected.

19 In October, UK commercial layer chick placings fell by 5.2 per cent to 4.2 million chicks; broiler chick placings rose by 2.3 per cent to 101.3 million chicks; turkey chick placings rose by 5.8 per cent to 900,000 chicks; turkey slaughterings rose by 0.4 per cent to 1.7 million birds; broiler slaughterings rose by 5.4 per cent to 108.4 million birds; and poultry meat production rose by 2.6 per cent to 199,200 tonnes.

20 Defra has issued a Compulsory Poultry Registration Form to register flocks of 50 or more birds which are kept captive for any period of time and are kept for the consumption of meat and eggs, for other commercial purposes, for restocking game birds or breeding for any of these purposes. It has also issued a Voluntary Poultry Registration form for keepers of fewer than 50 birds. “Poultry” includes chickens, turkeys, ducks, geese, guinea fowl, quail, partridges, pheasants and pigeons.

21 In the light of cases reported in the summer in Belgium, Netherlands, Luxembourg and Sweden, Defra has updated its guidance on Newcastle disease.

22 In the quarter to September, 7.7 million cases of eggs were packed, 0.6 per cent up on the second quarter and 2.1 per cent up on a year earlier. Production of egg products fell by 10.2 per cent on the second quarter but was up 6 per cent on a year earlier. The average farm-gate price was 69.3p per dozen, down 0.7 per cent on the second quarter and 0.1 per cent compared to a year earlier.

+ Inputs / Supply business

1 Fera and the Centre for Crop Health and Production have created a new testing facility for pesticides near York which can simulate natural aquatic environments under controlled conditions.

2 DWR Cymru Welsh Water has been granted £1m by the Welsh Government’s Rural Development Programme to expand the PestSmart project which promotes the safe use, storage and disposal of pesticides.

+ Marketing

1 Research conducted by Assured Food Standards has revealed that over one-third of British consumers believe that food production standards in countries such as USA and New Zealand are as high as those in the UK.

2 The NFU has produced a brochure ‘Farming Shop Window’ in an attempt to increase the proportion of British food procured in the food service sector.

3 Defra has published updated guidance on the rules which apply to the export of processed food and drink; meat, fish, dairy and other animal products; vegetables, fruit and other plants used as food; grain, if outside the EU; and sugar and rice, if outside the EU.

+ Miscellaneous

1 In 2017 the mid-year population estimate for England was 55.6 millions of which 9.5 millions lived in rural areas and 46.2 millions lived in urban areas. In 2011 the similar estimate for rural areas was 9.1 millions. However, the proportion of the population living in rural areas has fallen from 17.2 per cent to 17 per cent. The average age of the population in rural areas was 44.6 years compared to 39 years in urban areas.

2 The Government is to introduce legislation which will provide for financial penalties of up to £400 for householders who fail to pass household waste to a licensed carrier.

3 Susan Barratt, former chief executive of Natures Way Foods, has been appointed chief executive of food and grocery research charity IGD.

4 Defra has published the latest edition of the Food Statistics Pocketbook Summary.

5 Guy Shropshire, the founder of G’s Group, the leading salad vegetable supplier, has died age 92.

+ Postscripts

Three contractors are bidding to refurbish the fence at 10 Downing Street. One is from Birmingham, another from Liverpool and the third is from London.

All three go with a Downing Street official to examine the fence. The Brummie contractor takes out a tape measure and does some measuring, then works some figures with a pencil. “Well,” he says, “I figure the job will run to £900. £400 for materials, £400 for my crew, a profit for me.”

The Scouse contractor also does some measuring and figuring, then says, “I can do this job for £700, £300 for materials, £200 for my crew, and £200 profit for me.”

The bloke from London doesn’t bother to measure or figure, but leans over to the Downing Street official and whispers, “£2,700.”

The official, incredulous, says “You didn’t even measure like the others! How did you come up with such a high figure?” The bloke whispers back, £1,000 for me, £1,000 for you, and we hire the guy from Liverpool to do the job.” “Done!” replies the government official.

+ Business Box

Look after me and I will look after you!

It seems thoroughly boring to repeat a subject only recently reviewed but a further case of ‘proprietory estoppel’ has highlighted how litigious society has become and how important it is to ensure your affairs are in good order.

To remind you, ‘proprietory estoppel’ is a legal claim to rights to use property and potentially to transfer ownership.

Roger and Stephen, father and son, had equally owned a substantial farming business in Wiltshire since Roger’s brother and partner had retired in 2008. Roger developed signs of dementia and, as a consequence of a deterioration in relations, served a notice to dissolve the partnership in 2012. Stephen challenged the notice and contended he had been promised theownership of the farm.

The High Court accepted the claim but this was appealed by Roger’s wife, Pamela.

The Court of Appeal ruled that, while the farm should pass to Stephen, insufficient provision was made for Pamela as, while Stephen would inherit the business, it should not be at the expense of his parents.

It can only be repeated. First and foremost is the wellbeing of the creators of the farming business. Continuation by the next generation should not be at their expense.

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The MFU was edited from

1991 to 2006 by John Nix,

Emeritus Professor of

Farm Business Management

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