Farming News Review - July 2011

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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 Government has published a natural environment white paper “The Natural Choice: Securing the Value of Nature”. The aim is to bring government and industry together to resolve how its goals of improving the environment and increasing food production can be simultaneously achieved.
G20 Ministers have agreed to set up the Agricultural Market Information System, an “early warning system” to improve transparency in agricultural markets. The database will be administered by the UN’s Food and Agriculture Organisation and will share information on global crop supply, stocks and demand.
Oxfam has called upon governments to redirect support to small-scale farmers at the expense of “industrial” large-scale producers. It predicts price increases of staple crops of 100-180 per cent by 2030 as demand for food increases by 70 per cent but predicts only a 1 per cent increase in crop yields. It suggests climate change will be the biggest driver of price increases.

CAP (etc.) support details/payments

The European Commission has revealed that the Common Agricultural Policy budget is to be gradually reduced between 2014 and 2020. It is proposing that the budget for direct payments will fall from £38 billions in 2013 to £34 billions in 2020. The rural development budget is expected to fall from £12 billions in 2013 to £11 billions in 2020. Up to 30 per cent of direct payments are expected to be conditional on “greening” measures. There may also be a scaling back of the highest farmers which could adversely affect UK farmers.
A report published by the European Court of Auditors has proposed that Single Payments should be limited to “active farmers” and capped to ensure fairer distribution. The ECA also recommended “defining eligible land and agricultural activity more clearly in order to exclude activities that do not increase agricultural productivity”.

Grants/regulations/legislation/environment

Six projects which will run for up to 5 years are to be funded by the BBSRC, the Scottish Government and 14 companies representing farmers, plant breeders and food processors. The projects are: development and validation of a flexible genotyping for wheat; increased pest resistance in oilseed rape; exploring knowledge of gene function to combat pod shatter in oilseed rape; new approaches to malting efficiency in barley; manipulation of photosynthetic carbon metabolism in wheat to improve yield; exploring sources of resistance to turnip yellow virus for use in oilseed rape.
A low-carbon farming project has been launched by the Soil Association to help farmers and growers reduce emissions and improve their resource efficiency.
EU funding has been awarded to the United Kingdom Vineyards Association to study and benchmark the sustainability of the English and Welsh wine industry. The aim is to work out priorities and recommendations for the future. Laurence Gould Partnership will carry out the study.
The Welsh Assembly has awarded £4.1 millions to Puffin Produce towards expenditure of over £8 millions on the installation of new technologies to reduce energy consumption, water use and waste in its potato and vegetable business.

Other matters of farm finance and tenure

The Agricultural Wages Board has imposed a wage settlement of 2.9 per cent on grades 2 and above and a 2.5 per cent increase on grade 1.
The UK Food Supply Chain report has been published by food and drink skills council Improve. The report shows how the food supply chain is the UK’s largest employer with 3.7 million employees, 14 per cent of the total workforce. Turnover stands at £412 billions, up 18 per cent since 2007 with exports worth £16.1 billions.
Defra has announced 50,000 new apprenticeships in the food and drink industry.
AG Thames, the supermarket supplier, has set up NewStairs Ltd, a dedicated business that will invest in varietal development and joint ventures with growers.

Product prices

A. Crops

This crazy season continues unabated. Forecasts of a dreadful harvest in parts of the UK have tempered somewhat with June rains but it remains likely the total crop will be well down on recent averages. This has led to increased volatility not helped by speculators diving in and out of the market. Feed wheat futures for July collapsed to £155/tonne but then rebound to £172/tonne although generally forward prices are well off the peak. At the end of June, deliveries for November 2011 and 2012 and May 2013 stood at £164/tonne (down £33), £150/tonne (down £21) and £158/tonne (down £21) respectively.
Average spot prices at the end of June (£/tonne ex-farm): feed wheat 165; milling wheat 185; feed barley 153; oilseed rape 380; feed peas 197; feed beans 202.
The average potato price continued to slide as new season crop takes hold. By the end of June the average had fallen to £169/tonne down £12 on the previous month. However, prices of quality old crop were holding up well with King Edward at £210 to £230/tonne. Top grade Desiree were achieving £230/tonne but other red varieties slipped in the month to £160 to £170/tonne. Estima improved to £180 to £225/tonne while top grade Maris Piper were making up to £240/tonne.

B. Livestock

Steer prices showed steady improvement partly influenced by export demand. At the end of June the average had risen to 168p/kg lw, up 8p on the month and 20p on the year. However, the average heifer price did not move in tandem finishing unchanged on the month at 166p/kg lw having lost its premium over steers. The volatility in the dairy cow market continued with sales averaging £1,168, up from £956 the previous month.
New season lamb continues to struggle as reported elsewhere. Prices which had reached 254p/kg lw in May fell heavily to close at 195p/kg lw but still 30p higher than a year earlier.
The average pig price continued its steady improvement closing the month at 152p/kg lw up 4p on the month and up 5p on a year ago.
The farmgate milk price eased from 26.57ppl in March to 26.24p in April as output approached its annual peak. Conversely the spot market improved in June to 27.91ppl, the highest ever June price and 2.53ppl higher than a year earlier. Milk quota slipped back from the May price of 0.57ppl to 0.50ppl and the fall was mirrored in the price of leased quota, down from 0.10ppl to 0.07ppl

Other crop news

The NFU has forecast that average wheat yields in England will be 14 per cent down on those in 2010 with a total harvest of about 12 million tonnes. Winter oilseed rape yields are forecast to be 9 per cent down on the 5-year average at 2.1 tonnes/hectare.
Russia has lifted its grain export ban.
Initial NIAB take-all root assessments at HGCA Recommended List trial sites reveal an average take-all index of 7.4 on the 1-100 scale in a range of second wheat varieties receiving no take-all active seed treatment. Two of the seven sites are showing infection levels above 10 per cent. In 2010, in the absence of take-all seed treatment, average second wheat control yields were 3.7 t/hectare below the same varieties grown as first wheats.
Scientists at Rothamsted Research have discovered the genetic code of septoria tritici, the most important wheat foliar disease. It is hoped the discovery will lead to the breeding of disease resistant plants.
Rothamsted Research Institute has applied to the Government’s Advisory Committee on Releases to the Environment to carry out the first field-scale trial of genetically-modified wheat since the 1990s.
HGCA is to spend £1 million each year over the next 3 to 4 years on research projects covering soil management; black-grass control; crop nutrition; increasing crop value.
Research undertaken by ADAS has indicated that common buckwheat has been shown to reduce couch levels in organic farming systems by 65 per cent compared with 25 per cent achieved with established cover crop phacelia.
Camgrain is to build a 90,000-tonne capacity grain storage facility near Kettering.
ADAS has announced that the latest Crop Monitor figures show that 84 per cent of crops and 34 per cent of oilseed rape plants are infected with light leaf spot.
Greenvale AP has developed a new potato for Sainsbury’s, Taste the Difference British Gems.
Heygate Farms of Swaffham has teamed up with Fenmarc Produce to produce Norfolk Peer, a new potato to be sold by Asda.
British Tenderstem broccoli is expected to yield 480,000 kg this season, an increase of more than 80,000 kg on last year.
Carrot supplier Walton Produce is to close its operation in Norfolk.
Defra has agreed that salad growers who have lost money as a consequence of the German E.coli scare can claim compensation from the EU’s €210 millions emergency fund. However, any claim will only cover produce dumped between 18 to 30 June and not the period from when the scare started. The EC management committee has agreed to pay a maximum rate of 50 per cent of the usual producer price in June although France and Spain voted against, demanding 100 per cent.
European Agricultural Products has suggested that growers could reduce beet cyst nematode levels as well as improve soil biomass and crop yields by planting a mustard crop after cereal harvest and prior to sugar beet drilling.
Denbies Estate in Surrey has won a gold medal in the rosé category at the International Wine Challenge with its Denbies Chalk Ridge Rosé.
The East Malling Trust and fruit trader AG Thames have planted a 7 hectare pear orchard investing over £250,000. The aim is to test the viability of a variety named Sweet Sensation, a red/blush pear.

Other livestock news

Defra has released a consultation document proposing that UK farmers who are part of a farm assurance or organic certification scheme could face fewer animal welfare inspections.
The Scottish Government has announced the creation of an independent expert panel to consider the future delivery of the food standards regime in Scotland.
A report for Quality Meat Scotland and Scottish Enterprise suggests that too many producers are missing the optimal time to sell their cattle resulting in overweight and overfat animals hitting quality and meat chain margins and efficiency.
EU Ministers have agreed that the age at which cattle will have to be tested for BSE will rise from 48 to 72 months.
Defra figures show that the number of new TB incidents in Great Britain rose by 6.3 per cent in January to March while if the effects of increased testing is factored out the increase was still 4.4 per cent.
The Welsh Assembly has announced there will be a review of the scientific evidence base regarding the eradication of bovine TB in Wales and that a badger cull has been deferred.
Defra has announced that British farmers will no longer be able to vaccinate their animals against bluetongue virus as legislation does not permit vaccination within a BTV-free zone which Britain became this month.
An NFU survey has shown that more than half of cattle farmers or their staff have injured themselves while clipping cattle.
The Scottish Red Meat Industry Profile 2011 has shown the farming and processing of red meat generated £1.8 billions in 2010, up 8 per cent on 2009, and accounted for 0.7 per cent of Scotland’s GDP. Meat processors increased turnover by 15 per cent to £930 millions while exports increased by 40 per cent.
Blood tests before and after calving could identify cows and heifers at greatest risk of problems in early lactation, according to Cornell University.
DairyCo is to create a research partnership with Scottish Agricultural College, Harper Adams and Reading University to focus on soil, forage and grassland. A second partnership with Nottingham University, Harper Adams, the Royal Veterinary College, Bristol University, Scottish Agricultural College and Aberystwyth University will examine health, welfare and nutrition.
A dedicated producer supply group is being created by Robert Wiseman Davies and the Co-operative Group which will pay a 1.35ppl premium over the processor’s standard price.
The European Parliament’s Agriculture and Rural Development Committee has approved a report calling for mandatory written contracts across the dairy sector with greater transparency and information requirements in the milk market.
A new code of on-farm practice for its producers has been launched by the Tesco Sustainable Dairy Group.
A new strain of Staphylococcus aureas has been discovered by researchers carrying out a study into mastitis in dairy cows. The antibiotic-resistant superbug is the first time any form of MRSA has been found in farm animals in Britain.
Average yields of Holstein herds increased in the year to September 2010 by 217kg to 8,432 kg. Jersey yields increased to 5,744kg and Ayrshire to 6,640 kg but yields of British Friesian fell by 45kg to 6,727kg.
A study supported by Pfizer Animal Health has suggested that using a dry cow tube alongside antibiotics as part of a dry cow therapy programme can reduce cases of clinical mastitis by over one-third.
First Milk has bought Kingdom Cheese and Kingdom Dairies of Fife.
Kantar Worldpanel research has shown that lamb sales fell by more than one-third in the 8 weeks to May having already fallen by more than 14 per cent in the first 3 months of the year.
Research undertaken by Ulster University has suggested that beef and lamb finished on grass is better for human health.
Bpex has set up a “Welfare Outcomes” project to explore and develop a science-based way of assessing pig welfare by measuring the pig rather than its environment. The project is based upon research into what pigs actually need, rather than what humans perceive they need.
Suffolk-based Tulip has entered into a long-term contract for the slaughtering of pigs from AP Jess of Angus. The contract will result in the re-opening of the Brechin abattoir.
Nottingham University has undertaken research suggesting that the level of salmonella in the guts of live chickens can be reduced by injecting the birds with a living “antibiotic” bacterium.
The European Commission has amended regulations as a result of which up to 0.1 per cent of non-EU approved GM crops will be permitted in imported feed.
The World Organisation for Animal Health has confirmed the eradication of rinderpest or cattle plague.

Inputs/Supply businesses

Fertilizer prices have increased across the board. Granular urea has increased to £327 per tonne, up by £185 per tonne on 2010 and up by £123 per tonne since April. The price of Ammonium Nitrate has risen to £323 per tonne, up from £210 per tonne a year ago.
Bayer CropScience has gained approval for the use of fungicide Rudis on outdoor parsnip, swede and turnip.
A new service provides Red Tractor Fresh Produce members access to Liaison, Fera’s online approval pesticide database.
Certis has gained approval for Cosine, a fungicide for the control of powdery mildew in apples and pears.
Scottish Agricultural College in collaboration with the UK Biochar Research Centre of the University of Edinburgh has established the first Scottish Environment Protection Agency – approved biochar trial. The field trial is using plots of barley to investigate the value of biochar as a soil additive.
The Horticultural Development Company has approved the use of Hallmark on protected and outdoor strawberries against capsid pests.
Dow AgroSciences is proposing to bring to the market a new residual herbicide designed to deliver grass and broad-leaved weed control in oilseed rape.
Devrinol has been approved for use on outdoor crops of rocket, Lambs lettuce, Chinese cabbage, collard, choi sum and pak choi to control annual meadow grass, knot grass, mayweed and other weeds pre-sowing.
Carrs Fertilisers is to be sold to Origin Enterprises.

Marketing

Members of the House of Commons Environment, Food and Rural Affairs committee scrutinising the draft Groceries Code Adjudicator Bill want the role to have increased powers to combat the “climate of fear” that exists in the groceries supply chain. Members have recommended that trade organisations should be able to make complaints on behalf of farmers and growers. In addition they want the adjudicator to have the authority to undertaken proactive investigations with the power to impose financial penalties.
The UN’s Food and Agricultural Organisation is predicting that global agricultural commodity prices will remain “high and volatile” throughout 2011. International food prices fell by 1 per cent in May but are 37 per cent higher than a year ago.
Latest figures from Kantar Worldpanel show that retail growth slowed to 2.5 per cent in June having grown by 7.8 per cent in the 4 weeks to 15 May.
Tesco has overtaken Sainsbury’s to be the lead seller of home-grown top fruit. This year Tesco has sold 31,408 tonnes compared to Sainsbury’s 31,325 tonnes. Sales across all supermarkets have risen by 4 per cent.
As a result of taking a substantial part of its salad procurement in-house to International Produce Limited, Asda has terminated its contract with English Village Salads with the potential loss of over 100 jobs.
Haldanes Stores Ltd and Ruston Retail Ltd have gone into liquidation.

Miscellaneous

Figures published by the Health and Safety Executive reveal the number of people killed in on-farm accidents in the year to March fell to 34 compared to 39 in the previous year.
The Central Southern Food and Farming Academy has been launched by Sparsholt College to boost continued learning in agriculture and the development of new skills.
Awards in the Queen’s Birthday Honours List: Robert Mitchell MBE, fruit grower and former Concordia chairman; Professor Bill McKelvey OBE, chief executive and principal, Scottish Agricultural College; Christopher Jones MBE, national president, Farm Crisis Network.