Farming News Review - January 2010

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Policy issues CAP (etc.) support details/payments Grants Farm finance Product prices

Other crop news Other livestock news Inputs Marketing Miscellaneous

Policy issues

The French Agriculture Minister, Bruno Le Mave, has indicated his resolve to form a strong coalition of nations to protect farm subsidies beyond 2013 by inviting 21 EU member states to a high-level meeting. Britain has not been invited, nor have Sweden, Denmark, the Netherlands or Malta, the so-called “CAP reformist” nations.
A Government-backed report by the Sustainable Development Commission, “Setting the Table”, has concluded that reducing meat and dairy consumption, eliminating waste and cutting fatty and sugary foods from diets will make the biggest impact on human and environmental health. The report states that an estimated 70,000 premature deaths could be avoided if diets matched nutritional guidelines. Around 18 per cent of greenhouse emissions are related to food consumption and production.
The International Institute for Environment and Development and Oxfam have produced a report “Fair Miles: Recharting the food miles map” in which they warn that western consumer concern over climate change can do more harm than good if it cuts demand for food produced in developing nations.

CAP (etc.) support details/payments

Parliament’s Public Accounts Committee has described Defra”s “complacent oversight” of the Single Payment Scheme as a “singular example of comprehensively poor administration on a grand scale”. The committee chairman, Edward Leigh, stated “it is an extremely serious charge from this committee that negligible attention has been paid to taxpayers’ interests.” It costs 6 times more to process a claim in England then in Scotland.
Government representatives have advised a closed meeting of producer organisation representatives that each of the 50 or so producer organisations will be investigated individually to assess whether the manner in which they use shared facilities is in accordance with the rules. No timescale has been indicated.
The Parliamentary Ombudsman has called on the Rural Payments Agency to pay £5,500 and £3,500 to two farmers as “modest financial remedy for substantive injustice” suffered by the farmers. However, Defra has refused and is offering £500 to each by way of an apology claiming there was “no basis” for making further payments.

Grants/regulations/legislation/environment

Defra has provided a £500,000 aid package to help Cumbrian farmers get their land back in working order following severe flooding. Farmers can apply for grants of up to £6,800 to remove gravel and other debris from their land.
The Processors & Growers Research Organisation has secured funding for a 3-year test on vining peas including downy and powdery mildew tests. In addition, a broad bean project will study yield, pod length and pod/seed ratios.
Agricultural shows in the West Midlands have been advised they can claim Strategic Investment Grants to help improve their sites.

Other matters of farm finance and tenure

Andersons has published its Outlook for 2010. It forecasts wild variations in combinable crops production costs creating opportunities for those who improve performance; insufficient profitability in field vegetables and roots to support necessary investment; consolidation of growers of sugar beet; a continued fall in the number of dairy producers despite increased returns; positive outlook for beef and sheep; pig returns under pressure; positive outlook for poultry.
Defra has admitted that 25 per cent of farm households are “below the modified low income threshold”.
The Welsh Assembly has announced an increase of 18 per cent in farm incomes in Wales, compared to only a 6 per cent increase in England. The increase is due to strong beef, lamb and milk prices during 2008 and the impact of the exchange rate on the Single Payment.
The area of land publicly marketed in 2009 fell to 131,498 acres, down from nearly 185,000 acres in 2008.

Product prices

A. Crops

Wheat and barley prices have dropped back this month; the combined result of multitude of factors, both positive and negative. On the downside: the US dollar is showing early signs of strengthening; the speculative commodities market traders are selling up, to close out their positions; Strategie Grains now estimate the EU wheat area for 2010 harvest to be up 3% on 2009. On positive side; the Ensus biofuels plant, with its annual appetite of 1.2 million tonnes, went on-line this month and the high world sugar price has lead to grain-based biofuel becoming a more viable substitute. Oilseed prices have held steady, helped by drought conditions affecting the Argentine sunflower crop. LIFFE wheat futures in late December, for deliveries in May 2010 and November 2010 and 2011, all dropped back from November levels, standing at £110/tonne (down £3), £112/tonne (down £3) and £116/tonne (down £4) respectively. Average spot prices in late December (£/tonne ex-farm): feed wheat 98, milling wheat 116; feed barley 78; oilseed rape 233; feed peas 132; feed beans 132.
Average potato prices improved this month as the demand for quality material increased, largely as a result of buyers stocking up for the expected demand in the Christmas period. Starting from late November’s average of £97 per tonne, prices strengthened in two steps, one at the beginning of the month and one mid-month. Prices in late December stood at £112 per tonne; up 15 per cent on last month, but still 6 per cent below Christmas prices a year earlier ( just below £122/tonne). The free market price also improved by a similar margin but more uniformly throughout the month. The closing position of £93/tonne was 17% below the December 2008 price of £112/tonne. With Christmas being a critical period, most trading this month has been via contracts agreed months earlier, meanwhile the free market has all but dried up. By late December, King Edward were achieving from £110 to £115 for general pack, up to £140/ tonne for top quality. Estima were obtaining between £55 to £65/tonne for general pack, up to £110 for best quality samples, whilst Romano prices held between £80 and £110/tonne. Desiree prices held steady and were achieving between £80 and £120/tonne; £140/tonne for top quality, whilst Maris Piper prices improved – ranging from £140, for average samples, up to £200/tonne for best quality.

B. Livestock

Average steer prices were volatile during the month, increasing by 13p/kg in the early part of the month but then dropping back by 6p/kg as the month progressed. The closing position was 157p/kg lw (up 5 per cent in the month, but on a par with prices a year earlier). The average heifer price tracked a similar path, closing the month at 163p/kg lw, increasing the premium over steers to 6p/kg. The average price for dairy cows in late November stood at £1,443 per head, up 5 per cent on the average a month earlier.
Lamb prices have remained very buoyant in the lead up to Christmas, gaining a further 13p/kg over the course of the month. By late December this put the average UK lamb price at 175p/kg lw, up 8 per cent on last month and 35 per cent above prices last Christmas.
The average pig price remained relatively steady (still in line with seasonal expectation). The price in late December stood at 139p/kg lw, which is 6 per cent above the average price (130p/kg lw) at the end of December 2008.
The average farmgate milk price for October (reported in December) showed further improvement on the back of the previous three months, up by a just over a third of a penny to 24.43ppl. The average price a year earlier was 2.93ppl higher (12 per cent). Milk quota prices by late December had dropped back to 0.40ppl for clean 4% butterfat holdings. Leased quota (4%) held steady for a further month at 0.10ppl.

Other crop news

The National Institute of Agricultural Botany has advised that more than half the winter wheat acreage in 2010 will be susceptible to yellow rust with nearly 60 per cent of that susceptible to the new Solstice yellow rust race.
The 2009 potato crop has increased by 3.5 per cent to 6.2 million tonnes with average yields of 47.2 tonnes per hectare compared to 45.7 tonnes per hectare in 2008. The planted area was unchanged.
A Glenside Group Farm trial has shown that correcting chemical imbalances and physical problems in the soil can help raise yields of good-quality, saleable potatoes by more than 60 per cent.
A report from the US Organic Centre claims that genetically modified seeds are expensive and cut average farm incomes. While non-GM soybean seed prices rose by 63 per cent between 1975 and 2000, since then prices have risen by 230 per cent.
The Food Standards Agency has established the GM dialogue steering group to discuss the potential benefits and risks of GM technology with consumers.
Huntapac Produce has developed a “Super A” carrot which is 40 per cent richer in betacarotene than normal varieties.
Swedeponic UK, the specialist producer of potted herbs which supplies almost half of all the potted culinary herbs sold in the UK, has changed its name to Lincolnshire Herbs.
UK soft fruit production increased by 17 per cent in 2009 to 58,400 tonnes. Blueberries rose by 305 per cent to 1,139 tonnes; blackberries rose by 33 per cent; strawberries rose by 17 per cent to 48,770 tonnes; raspberries were up by 3 per cent to 7,011 tonnes.
Research undertaken by East Malling Research Station has found that management programmes designed to produce apples with zero-pesticide residues can work but carry greater risk of losses from mussel scale, fruit tree red spider and woolly aphid.
Figures published by Agrarmarkt Informations – Gezellschaft reveal an 8 per cent fall in European organic apple production from 82,900 tonnes in 2008 to 76,100 tonnes in 2009.
Research at East Malling Research Station has revealed that most eye and storage rot infection of apples caused by nectria occurs during the blossom period.

Other livestock news

Goat, sheep and cattle farmers in the Netherlands are suffering from the largest Q fever epidemic ever recorded. The Dutch Ministry of Agriculture has decided to slaughter thousands of goats after Q fever caused the death of 6 people and infected a further 2,300 during the past 12 months.
Animal Health has announced changes to the TB movement rules including a new option of Approved Quarantine Units. Calves under 10 months old from restricted herds will be held in isolated groups and, after two clear tests, movement restrictions will be lifted; an expansion in the scope of Approved Finishing Units. Units without grazing but with wildlife proof housing will increase testing intervals from 90 days to 6 months; the formalisation and extension of TB Isolation Units. Restricted farmers will be allowed to separate and isolate groups of cattle for further testing benefiting particularly high value or pedigree animals.
The H1N1 “swine flu” virus has been confirmed in a herd of pigs in Norfolk. It is the sixth case to be found in pigs in the UK in 2009.
Stock bulls at cattle breeding company Genus have contracted Infectious Bovine Rhinotracheitis. The infection, which can be transmitted via semen, can cause abortion if cows or heifers are infected during pregnancy.
Defra has agreed the results of scrapie genotyping tests carried out by SAC can be used for breeding sheep bound for export within the EU.
The Food and Agriculture Organisation of the United Nations is expected to announce the worldwide eradication of Rinderpest or cattle plague.
A Scottish meat industry group which includes all major meat traders, wholesalers and producers has called upon the Scottish Government to cull the Meat Hygiene Service, controlled by the Food Standards Agency, and set up a “standalone Scottish meat hygiene service”.
A draft code of practice agreed by the Pig Meat Supply Chain Task Force will result in only pigmeat from pigs born, reared and slaughtered in UK being labelled “British”.
Figures released in the latest biannual “Tetra Pak Dairy Index” reveal an increase in the consumption of milk and other liquid dairy products in the developed world of 0.6 per cent over the past year and a forecast compounded annual growth rate of 2.2 per cent through to 2012.
Dairy Crest has announced a two year “fixed” price contract, a large volume supplier contract and simplified milk supply contracts. The initiatives are intended to encourage an increase in its direct supply volumes.
Morrisons and Arla Foods Milk Partnership have published the results of a research project into cross-breeding in dairy cattle. The conclusions include that cross-breeding can help address animal welfare concerns from both a financial and ethical perspective; reduce welfare problems linked to reduced longevity and reproductive performance; improve survivability, increasing potential of heifer sales and reducing requirements for replacements; result in the same or lower milk volume; provide the opportunity to increase the solids content of milk; improve the opportunity to increase calf income.
A report published by Welsh Assembly’s rural development sub-committee claims that a third of Welsh dairy farmers have quit the industry between 2003 and 2008 due to poor returns. It has called for the Assembly to establish an independent “Welsh Dairy Champion” to promote the industry’s interests, a UK ombudsman to help protect the industry and for public bodies to increase the proportion of dairy products they procure locally.
Defra is planning to introduce a maximum stocking density of 39kg/m² for conventionally reared chicken in England.
The European Commission has authorised the import of genetically modified maize produce MIR604 from the US.
C&K Group is to invest £5 millions in a 40,000 sq ft abattoir and meat cutting plant near Eye, Suffolk.
Anglo Beef Processors has closed its abattoir in Blackburn.

Inputs/Supply businesses

The International Fertilizer Industry Association has reported that nitrogen, phosphorus and potassium consumption worldwide was down 6.7 per cent to 156.4 million tonnes in 2008/09 with phosphorus down 10.5 per cent and potassium down 19.8 per cent.
Nitrogen prices have risen by up to £10 per tonne and compound prices have risen by £6- 10 per tonne due to increased demand amid fears that world prices are rising with India short of 1 million tonnes and China set to levy an export tax.
Residual herbicide Dacthal W75 (chlorthal-dimethly), which is used for pre-emergence weed control, is to be revoked on 23 March 2010 although growers will be allowed to use stocks during the following 12 months.
Bayer CropScience is making additional volumes of the fungicide Proline available for the barley market in anticipation of Fandango not being available early in the season as a result of quality formulation problems.

Marketing

The Organic industry has surpassed its initial target to raise funds to support a generic marketing campaign by receiving industry-pledged funding of £260,000 per year for 3 years. This should be matched by EU-funding.
The Potato Council is to recruit a team of 9 “potato ambassadors” from different regions around the country to get involved in marketing activity and help reinforce its campaign messages.
The European Union has chosen a shortlist of 3 logos out of 3,400 submitted entries as part of a competition which invited students to produce a new design for an organic logo. Voting can be done by visiting the EU website.
A marketing campaign has been launched by the Brassica Growers Association to attempt to halt the decline in the acreage of crops grown. Cauliflower has been hardest hit with the acreage falling by 20 per cent over the past 3 years.
The London Organising Committee of the Olympic Games has published “Food Vision”. The report indicates that the 330 tonnes of fresh produce required for the Games should ideally be organic. The benchmark standard is that the produce should be “Red Tractor” assured and UK Grade I or II. The produce should be “British, where available, seasonal and of high quality, fit for purpose and free from damage or spoilage”. All non-British produce should be fully “traceable”.
“Markets21”, research published by the Retail Markets Alliance, has reported that retail and wholesale markets have outperformed supermarkets during the recession. It found that 58 per cent of market managers reported no change in the number of traders selling fresh produce while 30 per cent reported an increase.
The Co-operative is to build a huge market next to the Arndale shopping centre extending to 8 hectares of which up to 50,000 sq ft will be the market site itself.
Total Produce has acquired the trade and assets of Utopia UK from administrator Pricewaterhouse Coopers.
Fresh Direct UK Ltd has acquired The Personal Catering Company.

Miscellaneous

Dacian Ciolofl, a former Romanian Agriculture Minister, is to be the new EU Agriculture Commissioner.
At a recent meeting of the National Horticultural Forum, Neil Bragg, chairman of the Horticultural Development Company, forecast that the National Institute of Agricultural Botany would be among the research stations which will close in the next 5 years as a result of lack of funding.
NFU membership has increased by 1,000 to 56,000 members during the past 12 months.
New Holland is to make a donation to the British Beekeepers Association on every occasion one of its tractors is sold in 2010.
The seventh annual Farming Scotland Conference will be held in Carnoustie on 4 February. Tickets are available from EQ on 01307 474274.