Monthly farming update

1 The Food, Farming and Countryside Commission has published ‘Our future in Our Land.’ The report recommends a 10-year plan to transition to agro-ecological farming with a national agro-ecology development bank to provide finance; support for farmer-driven innovation; creating farmer support networks; and extending support for Producer Organisations.

2 The European Union and Mercosur (Argentina, Brazil, Uruguay and Paraguay) have agreed a free-trade treaty which eliminates tariffs on 93 per cent of exports to the EU and grants ‘preferential treatment’ to the remaining 7 per cent.

3 Russia has extended the ban on EU agricultural products to the end of 2020.

1 The Scottish Government is to offer farmers interest-free loans of up to 95 per cent of their expected 2019 Basic Payment Scheme payments.

2 The second round of the Countryside Productivity Small Grants scheme has opened for applications. Grants of between £3,000 and £12,000 are available for equipment purchases. Added approved items include chlorophyll meters and ammonia analysers.

3 The Welsh Government has launched a consultation on the Sustainable Farming Scheme post-Brexit.

1 The Government has published a report on assessing progress towards World Health Organisation guideline levels of PM2.5 in the UK. PM2.5 is fine particulate matter which is understood to be the most damaging to health. Primary PM arises from activities such as burning coal and wood while secondary PM is formed from pollutant gases combining in the atmosphere and a key source is ammonia released from agriculture. It is estimated that one-third of PM2.5 in the UK arises from non-UK sources, disproportionately affecting the south-east of England including London.

2 Defra has issued a consultation on the overall sustainability of bio-based and biodegradable plastic products in comparison with those made from other materials; existing relevant plastic degradation standards and how they might be promoted without any adverse effects to the environment and disposal routes; and the design and implementation of standards for biodegradable plastics to ensure they are fully biodegradable in a reasonable time-frame. The consultation closes on 14 October.

3 The Government is to include legislation in the Environment Bill to make it easier to recycle by implementing a consistent approach across local authorities with a core set of recyclable materials to be collected from all households and businesses. Manufacturers will be required to put clearer labelling on packaging as to what can be recycled and will also be required to meet the full costs of managing the disposal of products particularly those which cannot be recycled.

4 Legislation is to be included in the Environment Bill which will require developers to ensure wildlife habitats are enhanced, with a 10 per cent increase in habitat for wildlife compared to a pre-development baseline.

5 The Government is to require water companies to work together to address issues such as transferring supplies between catchment areas during drought conditions and to ensure robust plans are in place to maintain supplies.

6 Following an evaluation process, projects in Yorkshire, Devon and Cornwall are to each receive up to £700,000 to increase research into, and uptake of, property-level measures which can better protect homes and businesses from flooding.

7 The Invasive Alien Species (Enforcement and Permitting) Order 2019 will come into force on 1 December. The law requires management measures to be put in place for widespread alien species. Meanwhile Defra has issued a consultation into how to best manage invasive non-native species. Plants covered include Nuttall’s waterweed, Chilean rhubarb, Giant hogweed, Floating Pennywort, Himalayan balsam, Curly waterweed, American skunk cabbage and Parrot’s feather. Animals covered include Egyptian goose, Chinese mitten crab, Muntjac deer, Signal crayfish, Grey squirrel and Slider terrapins.

8 Defra has issued a consultation on plans to encourage customers to reduce personal water consumption. The consultation closes on 11 October.

9 The Food Foundation has received a ‘sizeable’ grant from the National Lottery Community Fund which will enable it to keep the Peas Please project running for the next 4 years.

10 Between 1990 and 2018 countryside farmland butterflies fell by 10 per cent with a low in 2012 but a small recovery by 2018; countryside woodland butterflies fell by 40 per cent; farmland butterflies in long-term decline include white-letter hairstreak, wall, small tortoiseshell, gatekeeper, small copper, essex skipper and peacock; the ringlet, speckled wood, brimstone and holly blue have increased; woodland butterflies in long-term decline include wall, small tortoiseshell, small copper, white-letter hairstreak; essex skipper, gatekeeper, small heath and peacock.

11 Sighting of an Asian Hornet has been confirmed in Hampshire.

12 A survey undertaken by the Game and Wildlife Conservation Trust and the British Trust for Ornithology undertaken at moorland in Northumberland has revealed that management of predators such as foxes, crows and weasels can result in increases in ground-nesting birds. It found that ground-nesting raptors increased by 57 per cent, curlew by 51 per cent, golden plover by 75 per cent and lapwing by 57 per cent.

13 Bolton Fell and Walton Mosses in Cumbria has been declared a National Nature Reserve. It is home to one of Western Europe’s rarest and most threatened habitats, the lowland raised bog.

1 The 2018 Seasonal Labour in Horticulture End of Year Survey has been published. Seasonal Labour was used by 35 per cent of farms, ranging from 18 per cent of small farms to 55 per cent of large farms; 33 per cent of those farms which used seasonal labour reported a shortfall; for 37 per cent of farms which used seasonal labour, at least 75 per cent of workers had worked for the farm in previous years; 54 per cent of farms which experienced a seasonal labour shortfall had made changes to the running of their business in order to cope with the shortfall; 73 per cent of farms using seasonal labour reported that the productivity of their workers remained the same over the past 3 years; 67 per cent of farms experienced no shortfall of labour and of these 17 per cent had made changes to the running of their business to prevent a shortfall.

2 Data released by Plimsoll Publishing reveals that average profit margins in the fresh produce industry have risen by 1.3 per cent over the past year, the first increase in 3 years. The increase contrasts with the European fresh produce industry where margins were static.

3 The Agricultural Price Index for May shows outputs up by 2.1 per cent compared to a year earlier and by 0.4 per cent on April. Inputs rose by 5.4 per cent compared to a year earlier and by 0.1 per cent compared to April.

4 The Conservative Environment Network has launched a manifesto which calls for a tax on fertilizer and pesticides and the abolition of business rates relief for farmers.

A Market background

1 UK politics and the Brexit approach continued to monopolise the attention of Sterling Forex this month which, increased volatility aside, left the Pound weaker by the close of the month. Against the Euro, Sterling opened at 89.5p per €, fell to 90.4p, peaked at 89.0p, but closed in late July at 90.0p per € (0.5p weaker). The direction against the US Dollar was more clear and volatility could not hide the weakening of Sterling: opening at 78.7p per $, the Pound fell to 80.6p, recovered marginally to 79.7p but fell again to a late July close of 80.8p per $ (2.1p weaker). Brent Crude oil prices were subdued, improving mid-month but closing down overall; from an opening position of $64.74, the average price peaked just above $67.00, dropped to $61.95 before reaching a late July close of $63.15 per barrel; a net reduction of $1.59 (2 per cent).

B Crops

1 Average wheat prices dropped back materially over the course of the month as the Northern Hemisphere harvest started and progressed, pointing the market firmly at 2019 crop. Other drivers behind the fall were: reports of good yield and quality for US wheat, Ukrainian wheat and Brazilian maize; and reports that favourable weather in the US is assisting maize and soya development. However, questions remain as to whether the recent hot and dry conditions in Europe will suppress maize yields. Quality reports on the 2019 wheat harvest so far have brought milling premiums down. LIFFE feed wheat futures remained absolutely static for almost the whole of July but fell back in the final days as wheat harvest in Europe got well underway. In late July, deliveries for November 2019 and 2020 stood at £147/tonne (-5) and £150/tonne (-4) respectively, with May 2021 deliveries opening up at £156. Oilseed prices have bucked the trend and risen; initial estimates of UK harvest results appear to have underwhelmed, with this underpinned by weakening Sterling.

Average spot prices in late July (per tonne ex-farm): feed wheat £134 (-13); milling wheat £152 (-18); feed barley £116 (-7); oilseed rape £317 (+11); feed peas £199 (-5); feed beans £237 (-10).

2 The average potato price remained unquoted this month, due to the transition between old and new crop and the low volumes being traded. Demand for 2018 crop is waning as most buyers are holding out for new crop. Early reports on the 2019 harvest point towards above average yields and good tuber quality.

2019 crop prices for grade 1 packing in late July (per tonne ex-farm) were limited: Salad varieties, mainly Maris Peer, Gemson and Bambino, were trading at between £300 and £380; a small number of Maris Piper had moved at £215; and early white varieties were achieving between £230 and £270.

2018 crop prices for grade 1 packing in late July (per tonne ex-farm) were also limited: Maris Piper had dropped back to £180; King Edwards had improved to between £180 and £300; Estima and other white varieties with good baker content were moving at £380; and red skin varieties were obtaining £265.

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).

1 Harvest results from AHDB trial sites in Lincolnshire, Glamorgan and Hampshire for winter barley have been published. The average treated yield of control varieties at 10.62t/ha is ahead of the 5-year average of 10.07t/ha.

2 The AHDB planting and variety survey has revealed that the oilseed rape area in England and Scotland is down 11 per cent on 2018, the British wheat area is up 4 per cent, the spring barley is down 4 per cent and the winter barley area is up 11 per cent.

3 The Canberra bureau of the US Department of Agriculture has reduced its forecast of the Australian wheat harvest by 1 million tonnes to 21.5 million tonnes amid ongoing drought.

4 The AHDB has named Blairgowrie business Thomas Thomson as its third Strategic SmartHort Centre to act as a live case study for improvements in productivity.

5 The Agricultural Price Index for May for outputs shows increases of 10.1 per cent in all crop products, 12.3 per cent in cereals, 13.6 per cent in wheat, 0.1 per cent in barley, 42.6 per cent in oats, 31.6 per cent in potatoes, 8.2 per cent in industrial crops, 5.6 per cent in oilseed rape, 7.7 per cent in fresh vegetables and 18.6 per cent in fresh fruit, all compared to a year earlier. There was a fall of 46.5 per cent in forage plants. However, the converse applied when compared to April. There were falls of 3.3 per cent in crop products, 2.8 per cent in cereals, 3 per cent in wheat, 2.5 per cent in barley, 4.9 per cent in oats, 1.5 per cent in industrial crops, 1.5 per cent in oilseed rape, 7.2 per cent in fresh vegetables and 21.6 per cent in fresh fruit. The only increase was 3.7 per cent in potatoes.

6 The AHDB has developed a new strategy to manage powdery mildew in strawberry crops which is considered to be capable of reducing inputs and costs by up to 50 per cent. The programme can be seen at the Water Efficiencies Technologies Centre at East Malling, Kent.

7 The AHDB is to fund a Plum Demonstration Centre at East Malling.

8 Wind and cold at the end of May followed by a recent period of extreme heat has resulted in French growers reporting a higher proportion than usual of small fruit, particularly apples, peaches, nectarines and apricots.

1 Government officials have intercepted meat imports at Northern Ireland airports which showed DNA fragments of African Swine Fever.

2 Myles Allen, a professor at the University of Oxford, has claimed that farming can be ‘climate neutral’ within 30 years if methane emissions are reduced by 20 per cent.

3 The British Cattle Veterinary Association has reported that only 30 per cent of farmers in the bovine TB High risk area have undertaken any activity to improve bio-security on- farm.

4 Scientists at the University of Aberyswyth have developed two skin tests which can distinguish between animals which are infected with bovine TB and those which have been vaccinated.

5 In the year to April, the number of new herd bovine TB incidents in England fell by 5 per cent with a fall of 9 per cent in the High risk area but a rise of 14 per cent in the Edge area and 4 per cent in the Low risk area, all compared to the previous year. There were falls of 23 per cent in Scotland and 7 per cent in Wales. The number of herds not officially TB free fell by 6 per cent in England with a fall of 10 per cent in the High risk area but rises of 15 per cent and 14 per cent in the Edge and Low risk areas respectively. There was a fall of 24 per cent in Scotland but a rise of 1 per cent in Wales.

6 In June, UK prime cattle slaughterings fell by 0.2 per cent, compared to a year earlier, to 160,000; beef and veal production rose by 2.1 per cent to 74,000 tonnes; sheep slaughterings rose by 3.4 per cent to 903,000; mutton and lamb production rose by 6.4 per cent to 21,000 tonnes; pig slaughterings fell by 1 per cent to 824,000; and pigmeat production rose by 0.1 per cent to 72,000 tonnes.

7 The Agricultural Price Index for May shows a fall of 3 per cent in the output of animals and animal products compared to a year earlier with falls of 7.5 per cent in animals, 8.2 per cent in cattle and calves, 1.2 per cent in pigs, 23.6 per cent in sheep and lambs, 2.9 per cent in poultry and 1.4 per cent in eggs. However, there were increases of 3.4 per cent in animal products and 4.4 per cent in milk. Compared to April there was an overall increase of 0.6 per cent with increases of 1.6 per cent in animals, 4.7 per cent in pigs, 2.2 per cent in sheep and lambs and 3.5 per cent in poultry while there were falls of 1.3 per cent in cattle and calves, 1.4 per cent in animal products and 1.6 per cent in milk.

8 Since the last report in March, there have been four new outbreaks of bluetongue virus BTV-8 in Germany but no further outbreaks in either Belgium or France.

9 Israel has reported an outbreak of Lumpy Skin Disease in a dairy farm while Turkey has reported two outbreaks. It is a pox virus of cattle primarily transmitted by insects and can affect yields and damages the hides.

10 Rothamsted Research has reported that the reseeding of permanent pasture makes an adverse contribution to climate change and does not increase yields beyond the first year.

11 A research project from The Prince’s Countryside Fund and supported by the Livestock Auctioneers Association and the University of Exeter has the aim of demonstrating the economic and social benefits of marts to farming.

12 The Health and Safety executive has lifted the restriction on feeding crops to livestock which have been treated with the sprout suppressant maleic hydrazide.

13 During May, UK dairies processed 1,317 million litres of milk, a year on year fall of 0.2 per cent but 4.2 per cent up on April. Liquid milk production rose by 1.8 per cent (0.3 per cent); cheese production rose by 4.6 per cent (-0.3 per cent); butter production rose by 7.1 per cent (1.0 per cent); and milk powder production fell by 0.3 per cent (+0.7 per cent).

14 First Milk is consulting over the closure of its Arran dairy and scaling down production at Campbeltown.

15 Following the closure of its Foston dairy in Derbyshire, Muller has given notice to terminate the contracts of 31 producers.

16 The latest Kingshay Dairy Costings Report, which provides data from 2,000 herds with 400,000 cows across the UK, shows that while smaller herds produced less milk in 2017/18 due to the summer drought, larger herds produced higher output with a 1.2 per cent increase in the 500,000 – 1m litre range and a 5.1 per cent increase in the over 5m litre range.

17 Scotland’s Rural College has attracted an investment of £8 millions in a new Centre of Dairy Innovation at its Barony Campus, Dumfries.

18 Four further outbreaks of African Swine Fever have been reported in domestic pigs in China in the past month. Two further outbreaks have occurred in Vietnam where over 3 million pigs have been culled since the first outbreak in February. New outbreaks have occurred in Laos, Cambodia and Mongolia.

19 During June, UK commercial layer chick placings fell by 11 per cent, compared to a year earlier, to 3.2 million chicks; broiler chick placings fell by 0.9 per cent to 85 million chicks; turkey chick placings rose by 13 per cent to 1.5 million chicks; turkey slaughterings fell by 14 per cent to 800,000 birds; broiler slaughterings fell 2.8 per cent to 80.9 million birds; and total poultry meat production fell 2.3 per cent to 143,090 tonnes.

20 During the first three months on 2019, 7.9 million cases of eggs were packed in the UK, 3 per cent up on the same period last year but a 0.2 per cent decrease on quarter four in 2018. The average farm-gate price was 69.7 per dozen, 2.2 per cent down compared to a year earlier and 0.3 per cent down on quarter four in 2018. The production of egg products was 20,800 tonnes, 12 per cent down compared to a year earlier and 8.7 per cent down on quarter four 2018.

21 The first case in 2019 of West Nile virus has been reported in a snowy owl in northern Germany.

1 The Crop Protection Association has estimated that the average annual family shopping bill will increase by £786 if pesticides are banned.

2 Austria is to completely ban the use of glyphosate.

3 Under a ruling which comes into effect in July 2022, changes to the European Union’s Fertilising Products Regulation will mean that manufacturers of biostimulants will need to prove that a product achieves the effects claimed on the label.

4 The Agricultural Price Index for May for inputs shows an increase of 6.3 per cent in all goods and services compared to a year earlier with increases of 3.3 per cent in seeds, 11.2 per cent in energy and lubricants, 14.8 per cent in fertilizers and soil improvers, 1.5 per cent in plant protection products, 15.2 per cent in veterinary services, 6.7 per cent in animal feedingstuffs, 3.6 per cent in straight feedingstuffs, 8.1 per cent in compound feedingstuffs, 2.6 per cent in vehicle maintenance and 3.4 per cent in building maintenance. Compared to April, the overall increase was 0.2 per cent with increases of 2.6 per cent in energy and lubricants, 0.2 per cent in fertilizers and soil improvements, 1.2 per cent in veterinary services and 0.4 per cent in vehicle maintenance. There were falls of 0.4 per cent in animal feedingstuffs and 0.5 per cent in building maintenance.

5 Bayer has been granted EAMU for fruit insecticide Batavia (spirotetramat) for the control of woolly apple aphid.

1 The annual report from the Groceries Code Adjudicator has revealed a reduction in complaints from all nine of the most-reported areas of concern in the past year. Issues concerning forensic reporting are down to 7 per cent, margin maintenance to 8 per cent, ‘pay to stay’ to 5 per cent and payment delays to 19 per cent. Comparable figures for 2014 were 45 per cent, 36 per cent, 25 per cent and 35 per cent respectively. The most improved retailers were Tesco, Morrisons, Asda and the Co-op.

2 Following a period of consultation, the Environment Bill will introduce powers that will enable a deposit return scheme for drinks containers to be implemented in England, Wales and Northern Ireland from 2023.

3 Kantar figures for the 12 weeks to 16 June show supermarket sales increasing at a rate of 1.4 per cent, the third straight year of consecutive growth.

4 The Welsh Government has launched a consultation on how to grow the food and drink sector’s scale and value, how such a policy would benefit people and society and how it would promote Wales as a food nation. The consultation closes on 15 October.

5 Application has been made for Geographical Status for Iveagh Rapeseed Oil from County Down.

1 Theresa Villiers has replaced Michael Gove as Defra Secretary. In 2018 she led a call to ban live animal exports.

2 George Eustace has returned to Defra as a Minister of State.

3 A survey conducted by the CLA of 38 police forces has revealed that 40 per cent do not have a rural crime team, 37 per cent lack a dedicated rural crime strategy, 47 per cent do not have dedicated rural crime prevention tools and 27 per cent have no officer of inspector rank or above leading the department.

4 Figures released by the Health and Safety Executive show that 32 agricultural workers were killed on farms in the year to March, a 20 per cent increase on the previous year. In addition 7 members of the public died in farming-related incidents.

5 Latest statistics show that the average life expectancy in Mainly Rural areas is two years longer than those who live in Urban with Minor Conurbation areas.

6 Professor Gideon Henderson has been appointed Defra’s Chief Scientific Adviser. He is currently Professor of Earth Sciences at the University of Oxford.

Strange funeral!

A woman was leaving the local cafe with her morning coffee when she noticed a most unusual funeral procession approaching the nearby cemetery.

A long black hearse was followed by a second long black hearse about 50 feet behind. Behind the second hearse was a solitary woman walking a pit bull terrier on a leash. Behind, were 200 women walking single file.

The woman couldn’t stand the curiosity. She respectfully approached the woman walking the dog and said, “I am so sorry for your loss, and I know now is a bad time to disturb you, but I’ve never seen a funeral like this. Whose funeral is it?

The woman replied, “Well, that first hearse is for my husband.”

“What happened to him?”

The woman replied, “My dog attacked and killed him.”

She inquired further, “Well, who is in the second hearse?”

The woman answered, “My mother-in-law. She was trying to help my husband when the dog turned on her.”

A poignant and thoughtful moment of silence passed between the two women.

“Can I borrow the dog?”

“Get in line.”

Changes may be simple, the impact won’t be!

The Office of Tax Simplification has published its second report on the review of Inheritance Tax. Given the task list of the new Prime Minister it is difficult to see if the matter will be high on the Government’s agenda but it may be an indication of what is to come.

The key recommendations are as follows:

• The annual gift exemption and the exemption for gifts in consideration of marriage should be abolished. These exemptions should be replaced with an overall personal gifts allowance.

• At present, gifts made within 7 years of death may be chargeable to Inheritance Tax although an element of tapering may apply. The 7 year period should be reduced to 5 years and taper relief should be abolished.

• Any Inheritance Tax liability arising on death should be payable by the estate and the lifetime allowance should be apportioned between all lifetime gifts with any balance available to the estate. At present, when a lifetime gift is made, if that gift becomes chargeable, liability for any Inheritance Tax falls upon the recipient and the lifetime allowance is allocated to gifts in the order in which they are made.

• Where a relief or exemption from Inheritance Tax has applied on death, there should be no uplift to market value for the purpose of Capital Gains Tax. Currently, on death, for the purpose of Capital Gains Tax, all assets are revalued to market value.

• When considering whether 100 per cent Business Property Relief applies for the purposes of Inheritance Tax, the level of trading activity must exceed 80 per cent to make it consistent with qualifying conditions for similar Capital Gains Tax reliefs. Currently the level of trading activity must exceed 50 per cent to obtain Inheritance Tax relief.

• For the purposes of Income Tax and Capital Gains Tax, a furnished holiday letting activity meeting certain conditions is treated as a trade. For the purpose of Inheritance Tax, HM Revenue & Customs regards the activity as that of investment. The activity should be coordinated as trading.

• For a farmhouse to qualify for 100 per cent Agricultural Property Relief the owner must be in occupation. This relief can be lost if the farmer has to go into care towards the end of life. The application of the relief should be more flexible in sensitive cases.

• The proceeds of a term life policy are potentially chargeable to Inheritance Tax unless the policy is ‘written in trust’. All such proceeds should be exempt from Inheritance Tax.

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