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 June 2020
1 The Government has announced the UK’s Global Tariff Schedule which will replace the EU external tariff regime. The tariffs will apply to all third country imports except for those delivered under free trade or similar agreements.
2 The Climate Change, Environment and Rural Affairs Committee of the Welsh Parliament has called for an amendment to the Agriculture Bill whereby the Government would be forced to report either annually or biannually on the UK’s food security. Meanwhile an amendment to the Bill which would have banned low standard food imports was defeated in the House of Commons.
+ Reform June 2020
+ Grants / regulations / legislation / environment June 2020
1 Research England has awarded £3.8 millions to a new National Innovation Centre for Rural Enterprise involving experts from Newcastle, Warwick, Gloucestershire and the Royal Agricultural Universities.
2 The Forestry Commission has called for increased awareness of the Oak Processionary Moth and associated caterpillars. It is established in London and surrounding areas.
+ Other matters of farm finance and tenure June 2020
1 The first estimate of 2019 Total Income from Farming has been published. TIFF increased by 8 per cent, or £398 millions, to £5,278 millions. Agriculture contributed £10,408 millions, or 0.53 per cent, to the national economy, an increase of £633 millions. TIFF per annual work unit increased by 5.6 per cent to £26,703. Employee costs rose in line with the increase in the national living wage to £2,775 millions with agriculture providing 1.45 per cent of UK employment.
2 The first estimate of 2019 Total Factor Productivity of UK agriculture has been released. Overall TFP is estimated to have increased by 4 per cent to its highest ever recorded level driven by an increase in levels of production combined with a small decrease in the volume of inputs. The volume of outputs increased by 3.8 per cent with the volume of crop outputs up by 7.8 per cent, livestock meat outputs by 1.6 per cent and livestock product outputs by 1.8 per cent. The volume of inputs fell by 0.2 per cent.
3 Quality Meat Scotland and AHDB have published the Monitor Farm Impact Report covering the first three years of the programme. A survey has revealed that 93 per cent of those who attended a Monitor Farm meeting felt it had been a good use of time while 70 per cent suggested they had formed new networks and built relationships with the farming community.
4 The Agricultural Price Index for March shows that output prices rose by 3 per cent compared to a year earlier and by 2.4 per cent compared to February. Input prices fell by 1.8 per cent compared to a year earlier but rose by 0.4 per cent compared to February.
5 Morrison’s is to invest £2 millions of its apprenticeship levy funds to address skills issues facing the farming community.
+ Product prices June 2020
Prices and the availability of prices have been severely hampered by the Coronavirus pandemic (“CV19”); every effort has been made to ensure the information below is accurate.
A Market background
1 Sterling exchange rates against the Dollar and the Euro stayed volatile this month but with a negative underlying trend, particularly against the Euro. Sterling lost against the Euro early on, having started the month at 87.0p per €, it weakened to 89.0p in the first few days; after recovering to 87.1p it then fell further to a low of 90.5p, eventually closing the month at 90.1p per € (3.1p weaker). Movement was less marked against the US Dollar: Sterling opened at 80.0p per $ and fell over the course of the first fortnight to 82.7p but the latter half of the month saw a partial recovery to a closing rate of 80.9p per $ (0.9p weaker). Crude oil prices started to track back towards normality as the signs of CV19 lockdown beginning to unwinding became more tangible; Brent Crude oil prices secured significant gains, improving from a starting position of $26.44 per barrel to a peak of $36.17 before closing at $35.29 per barrel; an improvement of $8.85.
1 Cereal prices improved materially this month as various weather concerns came to light across the globe, highlighted by reports from MARS and Strategie Grain, leading many to scale back their predictions of a large 2020/21 crop surplus; the price-positive effect of this was magnified by the weaker Sterling. The deficit of spring rainfall across Europe and South West Russia is reaching the point where permanent crop damage may result if rain does not arrive soon. Whilst the same positive pressure applied to barley prices, the larger crop area this season left the net effect marginal. LIFFE feed wheat futures were broadly positive, but with a mid-month lull. By late May prices had improved (significantly in the short term) with deliveries for November 2020 and 2021 up to £172/tonne (+10) and £154/tonne (+6) respectively. Oilseed rape prices remain suppressed by the comparatively low crude oil price and volatile Sterling rates but recent oil price improvements and the continued dry weather overcame the negative pressure this month. Pulse pea and bean prices dropped back as the perceived imbalance between supply and demand has settled.
Average spot prices in late May (per tonne ex-farm): feed wheat £157 (+10); milling wheat £180 (+11); feed barley £123 (-); oilseed rape £314 (+13); feed peas £216 (-16); feed beans £224 (-16).
2 The average potato price held relatively steady this month, as the end of the 2019 marketing season approached. The market remained under pressure, as the lack of restaurant and chip shop activity led to the frying varieties, normally destined for them, hitting the domestic and packing markets instead. Crop development, hampered by an unseasonably heavy frost in parts and also a lack of rainfall in most areas, is running behind compared to previous seasons; those without irrigation are already scaling back yield expectation. By late May the average potato price, having peaked again at £213 per tonne, closed with a net drop of £3 to sit at £203 per tonne (£10 below the May 2019 closing average) whilst the free-buy average, having peaked at £225 per tonne, closed the month at £200 (£32 behind the average a year earlier).
2019 crop prices for grade 1 packing in late May (per tonne ex-farm): Maris Piper had dropped back, mainly at the lower end, to between £160 and £350; white varieties had improved at the top end to between £150 and £385, with the best prices being for high baker content; red varieties had fallen back at the top end to between £210 and £260.
1 Cattle prices improved over the course of the month. The average finished steer price recovered from last month’s reduction moving from an opening position of 182p/kg lw to a closing peak of 189p/kg lw (up 7p to sit 7p above the closing average a year earlier). The average finished heifer price improved also but not to the same extent; holding steady for the first half of the month and improving from the opening position of 193p/kg lw to 197p/kg lw where it closed (up 4p to sit 2p above the price a year earlier). The average dairy cow price returned to volatility, largely due to the wider issues of the CV19 related drop in milk demand: improving from £955 to £1,136 and dropping back to £1,075 before closing the month on a high of £1,242 (an improvement of £287 in the month and £134 above the closing average a year earlier).
2 Lamb prices shifted from old season to new season this month, the old season price held relatively steady, before the sizable jump to new season pricing. The average old season finished lamb price (SQQ live weight), from an opening position of 211p/kg lw, dropped to 206p/kg but was back to 211p/kg before switching to new season and closing at 252p/kg lw (up 41p and sitting 17p/kg above the average a year earlier).
3 The average UK all pig price (APP) gained again this month, continuing the trend where the tight supply of pork outweighed the reducing demand from CV19 affectation. Opening at 166.0p/kg dw, the average improved to a close at 167.6p/kg (up 1.0p to sit 21.0p/kg above the closing average a year earlier).
4 The UK average ‘all milk’ price for March, published in May, reported an average of 28.71ppl, a gain of 0.04ppl over the February average (0.24ppl below the average in March 2019 and 1.44ppl above the rolling 5 year average of 27.19ppl). In the rankings against the ‘EU28’ farmgate milk price for March, the UK ranked 22nd against a stronger EU28 weighted average of 31.70ppl, largely as a result of the weaker Sterling.
+ Other crop news June 2020
1 The first estimate of 2019 Total Factor Productivity in UK agriculture shows an increase of 24.1 per cent in the output of cereals with increases of 22.9 per cent in wheat, 27.9 per cent in barley, 22.9 per cent in oats and summer cereal mixtures and 14.2 per cent in other cereals. The output of industrial crops fell by 5.6 per cent with falls of 13 per cent in oilseed rape, 42.1 per cent in other oilseeds and 2 per cent in sugar beet but an increase of 34.9 per cent in protein crops. The output of potatoes rose by 4.2 per cent and of other crop products by 7.1 per cent but the output of fresh vegetables fell by 0.7 per cent and of fruit by 0.6 per cent.
2 The Agricultural Price Index for March shows falls of 12.9 per cent in wheat, compared to a year earlier, 21.8 per cent in barley, 50.2 per cent in oats, 7.5 per cent in forage plants and 2.2 per cent in fresh vegetables. However, there were increases of 6.3 per cent in potatoes, 6.2 per cent in oilseed rape and 58.3 per cent in fresh fruit. Compared to February, wheat rose by 2.2 per cent, oats by 6.7 per cent, potatoes by 12.9 per cent, forage plants by 13.2 per cent, fresh vegetables by 7.5 per cent and fresh fruit by 19.9 per cent. However, there were falls of 1.7 per cent in barley and 0.4 per cent in oilseed rape.
3 Potato stocks rose to 1.19 million tonnes at the end of March, 20 per cent up on a year earlier and 5 per cent above the 5-year average.
+ Other livestock news June 2020
1 The first estimate of 2019 Total Factor Productivity in UK agriculture shows a 1.6 per cent increase in the output of livestock meat with increases of 0.2 per cent for cattle, 4.5 per cent for pigs, 7.3 per cent for sheep but a fall of 0.7 per cent for poultry. The output of livestock products increased by 1.8 per cent with increases of 1.5 per cent for milk, 3.8 per cent for eggs and 0.1 per cent for wool.
2 Animals under 6 months old have been temporarily exempted from bovine TB testing.
3 Defra has initiated a consultation on a proposal to manage the delivery of both vaccination and culling of badgers in the Edge Area of England. The consultation closes on 26 June.
4 In the year to February, there was a fall in new herd bovine TB incidents of 8 per cent in England, compared to the previous year, with falls of 8 per cent in the High risk area, 13 per cent in the Edge area and 1 per cent in the Low risk area. There was a fall of 13 per cent in Wales but a rise of 29 per cent in Scotland. The number of herds not officially TB free fell by 14 per cent in England, compared to a year earlier, with falls of 13 per cent in the High risk area, 19 per cent in the Edge area and 17 per cent in the Low risk area. There was a fall of 9 per cent in Wales but a rise of 58 per cent in Scotland.
5 During April, prime cattle slaughterings fell by 3.2 per cent, compared to a year earlier, to 157,000; beef and veal production fell by 3.3 per cent to 69,000 tonnes; sheep slaughterings fell by 21 per cent to 836,000; mutton and lamb production fell by 20 per cent to 21,000 tonnes; pig slaughterings rose by 2.4 per cent to 910,000; and pigmeat production rose by 4.1 per cent to 82,000 tonnes.
6 The Agricultural Price Index for March shows an increase of 2 per cent in the output of cattle and calves, compared to a year earlier, 23.5 per cent in pigs, 30.3 per cent in sheep, 5 per cent in poultry and 4.4 per cent in eggs but milk fell by 0.9 per cent. Compared to February, cattle and calves rose by 0.1 per cent, pigs by 3.1 per cent, sheep and lambs by 5.6 per cent and poultry by 1.6 per cent.
7 The latest UK Farm Animal Genetics Resources Breed Inventory has been published. In cattle there have been increases in the number of breeding females in 3 of the 5 rarest native breeds with the Vaynol up by 27 per cent. In sheep there has also been an increase in the number of breeding females in 3 of the 5 rarest breeds with the Lincoln Longwool up 4 per cent. Conversely, breeding females in all 5 of the rarest pig breeds have fallen with the Berkshire down 14 per cent.
8 The High Court has approved a decision of Defra not to grant Derbyshire a badger cull licence.
9 The latest Global Dairy Trade Auction, on 5 May, saw an average price achieved of £2,319 per tonne, 0.8 per cent down on the 21 April figures, with cheddar down by 6.8 per cent and butter by 5.8 per cent. However, milk futures on the Chicago exchange were 30.1 per cent up on April 22 levels.
10 The European Commission has forecast a 0.4 per cent increase in milk production in 2020 across member countries but milk use in the US is expected to fall 0.5 per cent from the previous estimate.
11 The Co-op has increased the price of a standard litre by 0.43ppl to 29.82ppl.
12 Average butterfat content fell by 2.5 per cent in April to 4.13 per cent but was up 2 per cent on a year earlier. Average protein fell by 1 per cent to 3.33 per cent and was down 0.9 per cent on a year earlier.
13 Freshways has advised milk producers that no payments will be made before 12 June and has threatened to reduce the A litre price to those producers who do not agree to the A/B pricing structure which pays 23.4ppl for 60 per cent of production and 10.14ppl for the balance.
14 An AHDB survey of milk buyers has indicated that there has been a fall of 470 producers, or 5.3 per cent, in the past year. However, fewer producers are producing more milk with the average producer achieving 1.5 million litres per year. Production in April was the second highest in the past 17 years.
15 The Rare Breeds Survival Trust has launched a 5-year conservation programme to revive the decline of longwool sheep breeds native to the UK.
16 Results from the Hybu Cig Cymru hill ram scheme have shown that lambs sired by performance recorded rams were, on average, 1.6kg heavier at 8 weeks than non-performance recorded equivalents.
17 Following the opening of the intervention scheme for skimmed milk powder and butter, Private Storage Aid schemes have been opened for cheese, butter and skimmed milk powder and beef, sheepmeat and goatmeat.
18 China and the Philippines have reported further outbreaks of African Swine Fever in domestic pigs while South Korea has reported cases in wild boar. India has reported 11 cases in domestic pigs.
19 Figures released by Statistics Denmark show that overall pig numbers rose by 5 per cent at the end of March, compared to a year earlier, to 12.7 million head.
20 In the 3 months to March, 7.8 million cases of eggs were packed in the UK, 1 per cent down on a year earlier and 0.2 per cent down on the December quarter. The average farm-gate price was 75.5p per dozen, 9 per cent up on a year earlier and 4 per cent up on the December quarter. The production of egg products rose by 5.6 per cent, compared to a year earlier, to 22,300 tonnes but was down 5 per cent on the December quarter.
21 During April, UK commercial layer chick placings fell by 6.2 per cent, compared to a year earlier, to 3.7 million chicks; broiler chick placings fell by 1 per cent to 101.8 million chicks; turkey chick placings rose by 3.8 per cent to 1.1 million chicks; turkey slaughterings rose by 5.6 per cent to 1 million birds; broiler slaughterings rose by 0.9 per cent to 104 million birds; and total poultry meat production rose by 2.2 per cent to 187,520 tonnes.
22 Hungary has reported 69 new outbreaks of Highly pathogenic avian influenza H5N8, all in commercial poultry premises.
23 An outbreak of American Foulbrood has been confirmed at an apiary near Blairgowrie.
24 France has reported an outbreak of equine infectious anaemia in the south of the country.
25 Thailand has reported three new outbreaks of African Horse Sickness.
+ Inputs / Supply business June 2020
1 The first estimate of 2019 Total Factor Productivity for UK agriculture shows a fall in the volume of inputs of 0.2 per cent. There were falls of 4.8 per cent in seeds, 1.4 per cent in energy, 1.9 per cent in fertilizers, 10 per cent in chemicals, 0.6 per cent in veterinary costs, 1.2 per cent in animal feed and 0.7 per cent in buildings maintenance.
2 The Agricultural Price Index for March shows an increase of 2.8 per cent in seeds, compared to a year earlier, 9.3 per cent in chemicals and 3.7 per cent in vehicle maintenance. There were falls of 3.6 per cent in energy and lubricants, 12.9 per cent in fertilizers, 0.6 per cent in veterinary services, 5.6 per cent in animal feedingstuffs and 2 per cent in building maintenance. Compared to February there were increases of 2.3 per cent in seeds, 1.1 per cent in fertilizers, 1 per cent in chemicals, 0.2 per cent in veterinary services, 1 per cent in animal feeding stuffs, 0.8 per cent in vehicle maintenance and 0.4 per cent in building maintenance but a fall of 3.4 per cent in energy and lubricants.
+ Marketing June 2020
1 AHDB, Dairy UK and the devolved governments are to jointly fund a 12-week campaign, at a cost of £1 million, to highlight the importance of fresh milk and dairy produce during the Covid-19 lockdown.
2 Grocery sales increased by 14.3 per cent in the 3 months to 17 May and by 17 per cent in the 4 weeks to mid-May according to Kantar. Sales at Lidl and Tesco rose by 16.5 per cent and 12.7 per cent respectively.
3 UK exports of pigmeat in March rose by 1 per cent, compared to a year earlier, to 91,400 tonnes but imports fell by 15 per cent to 209,800 tonnes.
4 In the 3 months to March, UK exports of fermented dairy products rose by 43 per cent, compared to a year earlier, while whey products rose by 11 per cent. However, cheese and curd fell by 14 per cent, milk powder and concentrates by 16 per cent and butter and dairy fats by 25 per cent.
5 China has imposed an 80 per cent import tariff on Australian barley imports and banned imports of beef from 4 Australian abattoirs because of labelling and health certificate concerns. China accounts for 50 per cent of Australian barley exports, worth £798 millions, and the affected abattoirs supply more than one-third of Australian beef exports to China.
6 Plaid Cymru has launched ‘I’m buying local’, a campaign to promote Welsh food.
7 Retail sales of British venison increased by 11 per cent in 2019 to £14.4 millions.
8 Morrison’s has launched the ‘British Farmers Food Box’ with every sale yielding £1 to be donated to farming charities via The Prince’s Countryside Fund.
9 A survey of 1,500 direct suppliers to the 13 regulated retailers, conducted by the Groceries Code Adjudicator, has revealed a 41 per cent fall in the number of suppliers who had experienced a Code-related issue over the past year.
10 Pig slaughterings in Germany fell by 3 per cent in the first quarter of 2020 and, while exports were unchanged, domestic supplies therefore fell as imports fell by 7 per cent. German retail sales of pork fell by 6 per cent in this period.
11 UK exports of fresh and frozen sheep meat in March fell by 3,500 tonnes, or 40 per cent, compared to a year earlier, while values fell by 21 per cent. However, sheep meat imports increased by 16 per cent in volume and by 34 per cent in value.
12 Cambrian Mountains Lamb has applied for protected geographical status.
13 EU pork exports in March to non-EU markets rose by 7 per cent, compared to a year earlier, to 268,500 tonnes with China doubling its imports.
+ Miscellaneous June 2020
1 The Livestock Worrying-Dogs (Protection of Livestock) (Amendment) (Scotland) Bill has been tabled in the Scottish Parliament. The bill proposes to increase the maximum penalty for allowing dogs to worry livestock to £5,000 or 6 months imprisonment as well as allowing the courts to ban a convicted person from owning a dog or allowing their dog to venture on to agricultural land.
2 In 2019, the UK area of organically farmed land increased by 2.4 per cent to 485,000 hectares of which 62 per cent is in England. However, the area has fallen by 34 per cent from the peak of 2008. The organically farmed area represents only 2.7 per cent of the total farmed area. The area in conversion fell by 15 per cent, the first fall since 2014. Much of the organically farmed area is permanent pasture (63 per cent), followed by temporary pasture (20 per cent) and cereals (8 per cent). Cereals cropped about 40,000 organic hectares with vegetables and other arable crops each occupying about 10,000 organic hectares. The number of poultry units farmed organically rose by 2.5 per cent to 3.5 million birds but this only represents 1.9 per cent of the poultry population. Sheep reared organically fell by 5.4 per cent to 782,000 head, pigs by 9.3 per cent to 34,000 head and cattle by 7.2 per cent to 301,000 head. The number of organic producers and processors fell by 1 per cent to 6,100.
3 Following a review by the Department of Education, Newton Rigg Agricultural College, in Penrith, is likely to be closed in July 2021.
+ Postscripts June 2020
Puns for Educated Minds
1. The fattest knight at King Arthur’s round table was Sir Cumference. He acquired his size from too much pi.
2. I thought I saw an eye doctor on an Alaskan island, but it turned out to be an optical Aleutian …
3. She was only a whiskey maker, but he loved her still.
4. A rubber band pistol was confiscated from algebra class, because it was a weapon of maths disruption.
5. No matter how much you push the envelope, it’ll still be stationery.
6. A dog gave birth to puppies near the road and was cited for littering.
7. A grenade thrown into a kitchen in France would result in Linoleum Blownapart.
8. Two silk worms had a race. They ended up in a tie.
9. A hole has been found in the nudist camp wall. The police are looking into it.
10. Time flies like an arrow. Fruit flies like a banana.
11. Atheism is a non-prophet organisation.
+ Business Box June 2020
An article from the The Daily Telegraph May 1920. Please download the PDF version to read in full.