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 September 2021
1 The Scottish Government has published ‘Agricultural Transition in Scotland’, a consultation document which will contribute towards the Statutory Consultation in 2022 and will lead to a successor to the Common Agricultural Policy.
+ Reform September 2021
+ Grants / regulations / legislation / environment September 2021
1 A grant of £1.8 millions from the BBSRC Industrial Partnership to a consortium led by the John Innes Centre will help towards finding solutions to tackle cabbage stem flea beetle. The project will attempt to identify genetic markers to help develop resistant varieties of oilseed rape that are less palatable to the beetle.
2 A report from the UN’s Intergovernmental Panel on Climate Change has suggested that the current carbon metric, GWP100, is unfit for purpose for assessing the impact of short-lived greenhouse gases, such as enteric methane.
3 The Government has launched ‘Climate Services for a Net Zero Resilient World’, a new research programme, with funding of £5 millions, to help inform future climate policy.
4 The Environment Agency has issued a consultation on updating the way organisations are charged for abstraction licences. The changes are likely to increase the charges for 55 per cent of abstractors. The consultation closes on 10 November.
5 The Government has announced increased funding over the next 3 years of £17 millions for the Catchment Sensitive Farming scheme. Coverage of the scheme will be the whole of England rather than 40 per cent as at present.
6 ADAS has concluded that the clarification of the interpretation of Rule 1 of the Farming Rules for Water by the Environment Agency could increase ammonia emissions to air, phosphorus losses to water and soil compaction.
7 A consortium of the Scottish Agricultural Organisation Society, the Industrial Biotechnology Innovation Centre and SAC Consulting has secured funding from Scottish Enterprise to investigate using sugar beet for the production of ethanol rather than petrochemical compounds.
8 A consultation has been launched regarding the release of beavers into the wild in England. It seeks views on potential future releases; current and future releases into enclosures; and mitigation and management of beaver activity or impacts in the wild. Plans have also been announced to give beavers legal protection making it an offence to deliberately capture, kill, disturb or injure beavers, or damage breeding sites or resting places.
9 Scotland’s Rural College has received a grant of £200,000 from the Scottish Government towards the £500,000 cost of a vertical farm at its King’s Building campus in Edinburgh. The facility will be used for crop research and education.
10 The Welsh Farm Business Grant has reopened for applications with funding of £2 millions available for investment in new technology and equipment. The window is open until the end of this month.
+ Other matters of farm finance and tenure September 2021
1 Average earnings in rural areas increased by 1.7 per cent in 2020 while in urban areas excluding London the increase was 4.5 per cent. This compares with an increase of 1.5 per cent in the Consumer Price Index. Average annual earnings in urban areas were £25,400 compared to £22,900 in rural areas.
2 The Agricultural Price Index for June shows that outputs rose by 1 per cent, compared to May, and by 12.3 per cent compared to a year earlier. The index for inputs rose by 1.2 per cent and 12.3 per cent respectively.
+ Product prices September 2021
A Market background
1 Sterling weakened overall against both Euro and Dollar this month, having first improved in both cases. Sterling remained volatile: opening against the Euro at 85.3p per €, it rose to a peak of 84.5p and fell to 85.9p, before improving marginally to close at 85.7p per € (0.4p weaker). The US Dollar opened the month at 71.9p, its strongest rate for the month; the exchange rate dropped to 73.5p, but recovered partially to close the month at 72.5p per $ (0.6p weaker). Crude oil prices were again volatile as predictions of global crude oil consumption were revised downward followed by reduced production forecasts. With a $10 swing in the month, Brent Crude, closing down overall, dropped from a starting position of $75.41 per barrel to $65.18p, before closing the month at
$73.31per barrel (down $2.10).
1 2021 harvest in the northern hemisphere has been a delayed and protracted affair so far, likely to extend well into September for most growers in UK, EU and Russia. Delays and low average yields have seen global supply forecasts revised downwards; crop prices responded accordingly by climbing throughout the month. Meanwhile, the US maize crop looks to be on track for good results, in the face of a tight global supply. Anticipation that the wet harvest will reduce wheat quality has seen average milling premiums push above £20/tonne. LIFFE feed wheat futures improved materially in the short term, less so in the medium term, and the longer term, whilst volatile, was broadly flat.
By late August, deliveries for November 2021 and 2022 were £196/tonne (+19) and £178/tonne (+7) respectively; May 2023 deliveries were £172/tonne (-) and November 2023 prices opened at £174/tonne but fell to close the month at £169/tonne. Oilseed rape prices bounced back up after last month’s decline, in light of renewed yield-vs-demand calculations, but the US relaxed its biofuel regulations at the end of the month which may lead to demand reductions in coming months.
Average spot prices in late August (per tonne ex-farm): feed wheat £181 (+16); milling wheat £202 (+20); feed barley £166 (+21); oilseed rape £475 (+39); feed peas £210 (+2); feed beans £218 (-).
2 2 The main source of potato prices, the AHDB Potato sector, ceased active operation in July 2021. A source of potato prices is being sought but no August average prices were available.
1 Cattle prices rose again this month, with limited volatility. The average finished steer price opened at 226p/kg lw and fell to 222p/kg before improving over the rest of the month to reach 235p/kg where it closed (up 9p, to sit 37p above the closing average a year earlier). The average finished heifer price reacted similarly but tailed off in the final days: opening at 235p/kg lw and dropping to 232p/kg before increasing to a peak of 247p/kg and relaxing to a closing average of 246p/kg (up 11p, to sit 40p above the price a year earlier). The average dairy cow price returned to volatility this month: opening at £1,183, it peaked at to £1,341, dropped to £1,090 before eventually closing at £1,158 (down £25 to sit £31 below the closing average a year earlier).
2 The average finished lamb price (SQQ live weight, new-season) opened the month by falling from its opening position of 258p/kg lw to 231p/kg where it held steady for the first half of the month. A small improvement mid-month saw the average reach 238p/kg lw, where it closed (down 20p, to sit 37p/kg above the average a year earlier).
3 The average UK all pig price (APP) continued to improve in the first half of the month but fell back as the month progressed. Opening at 164.9p/kg dw, the average improved to a peak of 165.7p/kg before dropping to a closing average of 164.8p/kg dw (down 0.1p to sit 3.5/kg below the closing average a year earlier).
4 The UK average ‘all milk’ price for June, reported this month, recorded a gain of 0.30ppl to an average of 30.41ppl (3.26ppl above the average in June 2020, whilst the EU (ex UK) average for May, published in August was 31.74ppl, an improvement of 0.24ppl over April.
+ Other crop news September 2021
1 Provisional results from the June Census of Agriculture show that the English 2021 wheat area is 1.62 million hectares, up 28 per cent on 2020; the barley area is down 23 per cent to 803,000 hectares; the oats area is down 6.8 per cent to 158,000 hectares; and the oilseed rape area is down 19 per cent to 267,000 hectares.
2 A report from the US Department of Agriculture forecasts reduced supplies of wheat, lower consumption and stocks estimated at 279 million tonnes, down 3 per cent on 2021/21. The Russian crop is forecast to be down 12.5 million tonnes due to lower than expected yields; the Canadian crop is forecast to be the lowest since 2010/11; and the US crop is forecast to be the smallest in 19 years. The maize forecast is for reduced production and animal feed usage with ending stocks down 2 per cent at 284 million tonnes. The soya bean forecast is also for reduced production but, because of lower crush demand, ending stocks are estimated to be up 2 per cent at 96 million tonnes.
3 On farm stocks of own grown wheat at the end of March 2021 in England and Wales fell by 41 per cent, compared to a year earlier, to 2,657,000 tonnes, while, at the end of June, stocks had fallen by 58 per cent to 403,000 tonnes. This followed a fall in the 2020 wheat harvest of 42 per cent, compared to a year earlier, to 8,807,000 tonnes. Barley stocks at the end of March were down by 3 per cent to 1,181,000 tonnes but the fall had increased by the end of June to 25 per cent at 117,000 tonnes. The barley harvest only fell by 1 per cent to 5,921,000 tonnes. Oats stocks at the end of March were up 30 per cent at 240,000 tonnes while by the end of June the increase had risen to 72 per cent at 41,000 tonnes. These increases were despite the oats harvest being down 9 per cent at 797,000 tonnes.
4 In 2020/21, usage of barley by brewers, maltsters and distillers fell by 3.2 per cent to 1.71 million tonnes, 8.3 per cent below the average for 2014/15-2018/19. Barley stocks fell by 11.6 per cent but were still 4.4 per cent above the 5-year average. Wheat usage increased by 12.4 per cent, compared to the 5-year average, to 818,900 tonnes, the highest since 1990/91.
5 Tim Lamyman of Lincolnshire has set a new world winter barley record with a crop of two-row KWS Tardis yielding 14.2t/ha at 14.97 per cent moisture content.
6 In 2020/21, the UK milled 5.65 million tonnes of wheat, including crop for starch and bioethanol, down 6.6 per cent from a year earlier and 15.8 per cent on the 5-year average. As a result of low availability, home-grown milling wheat usage fell by 21.5 per cent to the lowest since 1993/94. As a consequence, imported wheat usage increased by 97 per cent.
7 The Agricultural Price Index for June shows increases of 3.4 per cent for barley, compared to May, 2.5 per cent for oats, 7.5 per cent for potatoes, 14.3 per cent for oilseed rape and 2.3 per cent for forage plants but there were falls of 0.5 per cent for wheat, 3.7 per cent for fresh vegetables and 87.7 per cent for fresh fruit. Compared to a year earlier, there were increases of 34.1 per cent for wheat, 37.6 per cent for barley, 2.8 per cent for oats, 64.2 per cent for oilseed rape and 149.7 per cent for forage plants while there were falls of 5.7 per cent for potatoes, 1.1 per cent for fresh vegetables and 41 per cent for fresh fruit.
8 Rothamsted Research has been granted consent to release genetically modified Triticum aestivum plants.
9 In 2020, the value of home-produced vegetables increased by 10 per cent to £1.7 billions; the volume of home production increased by 3 per cent to 2.6 million tonnes; the value of field vegetables increased by 12 per cent to £1.3 billions; and the value of protected vegetables increased by 4.1 per cent to £350 millions. The value of home-produced fruit increased by 16 per cent to £1 billion but the volume fell by 4.5 per cent to 657,000 tonnes.
10 Scientists at Ghent University claim to have developed a vaccine which could prevent potato blight.
11 Tortoise beetles have been found in a sugar beet crop in Norfolk. It is the first ever case reported to the British Beet Research Organisation. The beetle can cause late defoliation of the crop.
12 Camellia has acquired an 80 per cent stake in Bardsley England for £15.7 millions.
+ Other livestock news September 2021
1 The Government is to introduce new animal welfare measures including higher standards for farm animals being transported in England and Wales with shorter journey times, more headroom and stricter rules on being moved in extreme temperatures. The new conditions will apply to all journeys over 65km.
2 The British Nutrition Foundation has published ‘Healthier and more sustainable diets: What changes are needed in high-income countries?’. The report concludes that meat provides ‘essential nutrients’ and that there was no need to reduce consumption of milk, yoghurt or eggs because of the high nutrient density of such foods relative to their environmental impact. It warns that widespread take-up of vegetarian or vegan diets may reduce intakes of iron, zinc, calcium, iodine and vitamin B12.
3 In the first half of 2021, registrations of beef calves rose by 0.2 per cent to 1.08 millions with increases of 6 per cent for Aberdeen Angus X, 7 per cent for Aberdeen Angus, 5 per cent for Hereford, 8 per cent for Stabiliser and 9 per cent for Stabiliser X. However, there were falls of 5 per cent for Limousin X, 5 per cent for Charolais X, 7 per cent for Simmental X and 11 per cent for Blonde D’ Aquitaine X.
4 Compassion in World Farming has urged the Government to cut UK meat and dairy consumption by 70 per cent over the next 9 years.
5 In July, UK prime cattle slaughterings fell by 9.8 per cent, compared to a year earlier, to 162,000 head; beef and veal production fell by 10 per cent to 73,000 tonnes; sheep slaughterings fell by 16 per cent to 1,084,000 head; mutton and lamb production fell by 17 per cent to 24,000 tonnes; pig slaughterings fell by 3.1 per cent to 940,000 head; and pigmeat production fell by 2.3 per cent to 85,000 tonnes.
6 The Agricultural Price Index for June shows increases of 2 per cent for cattle and calves, compared to May, 4.3 per cent for pigs and 1.2 per cent for milk but there were falls of 6.3 per cent for sheep and lambs and 1 per cent for poultry. Compared to a year earlier there were increases of 15.7 per cent for cattle and calves, 41.4 per cent for sheep and lambs, 2.6 per cent for poultry, 13.3 per cent for milk and 9.9 per cent for eggs but there was a fall of 6.1 per cent for pigs.
7 During June, milk available to processors fell by 6.9 per cent, compared to May, to 1,251 million litres; liquid milk production fell by 4.7 per cent to 474 million litres; cheese production fell by 5.3 per cent to 41,800 tonnes; butter production fell by 20 per cent to 18,800 tonnes; and milk powder production fell by 3 per cent to 15,600 tonnes.
8 Arla has reduced its price by 0.9ppl taking a standard litre to 32.3ppl and an organic litre to 40.66ppl.
9 In July, average butterfat fell by 0.1 per cent to 4.01 per cent but it was 0.4 per cent higher than a year earlier. Average protein fell by 1.5 per cent to 3.24 per cent and was 1.2 per cent lower than a year earlier.
10 The AHDB is to reintroduce the Pig Health Scheme this autumn.
11 There have been two reports of highly pathogenic avian influenza in the UK. HPAIV H5 has been found in three great skua on Fair Isle in Scotland with one testing positive for HPAIV H5N1. A further great skua carcass was found on the Flannan Isles. These cases follow a mass mortality of over 30 great skuas on St. Kilda with HPAIV H5N1 confirmed in one carcass.
12 In July, UK commercial layer chick placings fell by 27 per cent, compared to a year earlier, to 3.2 million chicks; broiler chick placings fell by 1.4 per cent to 113.9 million chicks; turkey chick placings fell by 9.1 per cent to 1.9 million chicks; turkey slaughterings rose by 32 per cent to 900,000 birds; broiler slaughterings rose by 8 per cent to 106.6 million birds; and total poultry meat production rose by 2.9 per cent to 182,400 tonnes.
+ Inputs / Supply business September 2021
1 In 2020, nitrogen use in Great Britain fell by 9kg/ha to 83kg/ha with a 17kg/ha decrease in the use on tillage crops to 121kg/ha and a 1kg/ha decrease in the overall rate on grassland to 53kg/ha. The overall use of phosphate fell by 1kg/ha to 15kg/ha with a fall of 2kg/ha to 24kg/ha in the use on tillage crops while the rate for grassland was unchanged at 8kg/ha. Potash use fell by 3kg/ha to 19kg/ha with use on tillage crops falling 5kg/ha to 29kg/ha while use on grassland was unchanged at 11kg/ha. Use of Sulphur fell by 2kg/ha to 16kg/ha with a fall in the use on tillage crops of 4kg/ha to 31kg/ha while grassland remained unchanged at 5kg/ha. 65 per cent of farms used organic manures on at least one field. By volume, cattle slurry had the greatest use at 49 per cent followed by cattle farmyard manure at 36 per cent.
2 Rothamsted Research has indicated that the fungus responsible for light leaf spot is increasingly resistant to azole fungicides but not QoI or SDHI fungicides.
3 The Agricultural Price Index for June shows increases of 2 per cent for energy and lubricants, compared to May, 8.6 per cent for fertilizers, 0.4 per cent for chemicals, 0.3 per cent for vehicle maintenance and 2.7 per cent for building maintenance but there was a fall of 0.4 per cent in animal feedingstuffs. Compared to a year earlier there were increases of 1.9 per cent for seeds, 23 per cent for energy and lubricants, 35.5 per cent for fertilizers, 1.5 per cent for veterinary services, 17.7 per cent for animal feedingstuffs, 4 per cent for vehicle maintenance and 16.4 per cent for building maintenance but a fall of 1.9 per cent for chemicals.
4 Kinto Plus, a seed treatment for use on winter cereals, has been launched by BASF.
+ Marketing September 2021
1 In the year to May, Kantar figures show that fresh produce sales rose by 7 per cent to £12.5 billions. In percentage terms, the largest increases were 54 per cent for limes, 35.1 per cent for garlic, 30.4 per cent for coriander, 25.6 per cent for Kiwi and 18.8 per cent for courgettes while there were falls of 15.2 per cent for peaches, 6.6 per cent for carrots, 6 per cent for baking potatoes, 5.4 per cent for nectarines and 3.2 per cent for cucumbers. In volume terms, sales of garlic rose by 27.8 per cent, cabbage by 18.5 per cent, sweet potatoes by 16.8 per cent, cauliflower by 14.9 per cent and mushrooms by 14.1 per cent. There were also increases in the salad sector with sweetcorn up 19.2 per cent, spring onions 16 per cent, cucumber 15.4 per cent and lettuce 14.8 per cent.
2 Exports of beef rose by 4 per cent in June, compared to a year earlier, to 9,700 tonnes with France up 350 tonnes, Ireland up 330 tonnes and Hong Kong up 250 tonnes. Exports to the EU were 3 per cent lower than a year ago but those to non-EU countries were up by 24 per cent.
3 In the year to July, retail meat sales fell by 1.6 per cent in Germany, 4 per cent in France and 2 per cent in Spain. However, sales of beef grew in both Germany and France while sales of sheep meat grew in France.
4 In the 6 months to June, the UK exported 177,638 tonnes of pork with shipments outside the EU increasing by 30 per cent compared to a year earlier. China took 83,000 tonnes and exports to the Philippines increased by 2,800 tonnes to 14,300 tonnes while exports to the US rose by 27 per cent to 3,348 tonnes.
5 According to Kantar, in the year to June, 13 per cent of dairy products were sold on-line, while 34 per cent of shoppers bought dairy products on-line, up from 24 per cent in the previous year.
6 During June, exports of sheep meat fell by 37 per cent, compared to a year earlier, to 4,600 tonnes. In the first 6 months of 2021 exports are down 24 per cent.
7 The Scottish Government has issued a consultation document to help shape a local food strategy.
8 In the first 6 months of 2021, dairy exports were down 11 per cent, compared to a year earlier, while imports were down 12 per cent. The only increase was in milk and cream where exports were up 2 per cent and imports up 17 per cent.
9 Gower Salt Marsh Lamb has become the first product to receive Protected Designation of Origin status after the end of the EU Transition period.
10 In the first quarter of 2021, exports of cheese totalled 2,300 tonnes. Exports to China rose from 64 tonnes, in the same period last year, to 467 tonnes while exports to South Korea rose from 53 tonnes to 165 tonnes.
11 Exports of pork fell by 24 per cent in June, compared to a year earlier, and by 11 per cent compared to May. In the year to date, exports are down 18 per cent at 102,000 tonnes although the value fall is only 8 per cent.
12 Single Malt Welsh Whisky has applied for UK Geographical Indication Status.
+ Miscellaneous September 2021
1 The latest Rural Crime Reports issued by NFU Mutual reveals that the cost of rural crime fell to its lowest annual level in 2020 in 5 years at £43.3 millions, a 20.3 per cent reduction. Agricultural vehicle theft fell by 2 per cent, quad bike and all-terrain vehicle theft by 18 per cent and livestock theft by 25 per cent. However, GPS theft doubled to a cost of £2.9 millions.
2 The Scottish Government has published the terms of reference for the Commission for the Land-based Learning Review. The Commission will undertake a review of learning in Scotland’s land-based and aquaculture sectors to provide opportunities and qualifications through school, college, university and apprenticeship to enable more people to work on the land.
3 In 2019, the mid-year population estimate for England was 56.3 millions of which 9.6 millions lived in rural areas. The increase for rural areas since 2011 was 500,000 although this increase was less in percentage terms than the increase in the urban population. The population of rural towns and fringes was 5.3 millions of which those in a sparse setting totalled 197,000. The population of rural villages and hamlets was 4.4 millions of which those in a sparse setting totalled 303,000. In 2019, the most prominent age groups in rural areas were those in the ’50 to 54’ and ’55 to 59’ bands with 7.9 per cent of the rural population. The most prominent age groups in urban areas were the ‘25 to 29’ and ’30 to 34’ bands at 7.2 per cent. In rural areas 25.1 per cent of the rural population was aged 65 or over compared to only 17 per cent in urban areas. In rural village and dispersed settlements those 65 or over represented 30.2 per cent of the population. The average age in rural areas was 44.9 years, 5.7 years greater than in urban areas. Compared to 2002, the average age in rural areas had increased by 3.1 years compared to 1.5 years for England as a whole.
+ Postscripts September 2021
Car Accident and the Pearly Gates
On their way to the church to get married, a young Catholic couple were involved in a fatal car accident.
Being good Catholics, the young couple find themselves sitting outside the Pearly Gates waiting for St. Peter to process them into Heaven.
While waiting, they begin to wonder: could they possibly get married in Heaven?
When St. Peter finally showed up, they asked him.
St. Peter said: “I don’t know. This is the first time anyone has asked. Let me go find out” and he leaves them sitting at the Gate.
After three months, St. Peter finally returns, looking somewhat bedraggled.
“Yes” he informs the couple “I can get you married in Heaven”.
“Great!” said the couple “But we were just wondering, what if things don’t work out? Could we also get a divorce in Heaven?”
“You must be bloody joking” says St. Peter, red-faced with frustration, slamming his clipboard on the ground.
“What’s wrong?” asked the frightened couple.
“OH, COME ON!” St. Peter shouted, “It took me three months to find a priest up here …
Do you have any idea how long it’ll take me to find a lawyer?”
+ Business Box September 2021
Think before you leap!
In the four months to July 2021, tax receipts rose by £76 billions, compared to the same period in 2020, to £226 billions. Clearly these are not representative figures as the receipts in 2020 were badly hit by the Covid-19 pandemic. But it is interesting to note that there were increases of 62 per cent for Stamp Taxes, 50 per cent for taxes on Hydrocarbon Oils, 33 per cent for Inheritance Tax and 27 per cent for Corporation Tax.
Stamp Taxes rose by £2.2 billions to £5.7 billions. In 2020/21 property sales were sluggish and tax receipts were affected by the Residential Stamp Duty Land Tax holiday. In the first part of 2021/22, residential property sales have been buoyant and July saw the highest month ever for Stamp Duty Land Tax receipts.
Perhaps the most interesting increase is that of Inheritance Tax where receipts rose by £500 millions to £2.1 billions. This is likely to be due to a freezing of reliefs and significant increases in asset values combining to drag more people into the Inheritance Tax net. With the tax-free bands frozen until 2026, it would seem that more and more estates will be liable to the tax.
Despite many not considering themselves to be wealthy, there has been an uptake in people seeking advice on Inheritance Tax mitigation. A recent survey has shown most popular tactics are outright gifts at 94 per cent, Business Relief at 78 per cent, the use of trusts at 73 per cent and life policies at 67 per cent.
Inheritance Tax planning is obviously worthwhile but it must be appropriate. No family simply wishes to gift their wealth to the Exchequer but all planning involves people and must recognise the current and possible future circumstances of all parties affected.
All eventualities must be considered, however unlikely they may seem.