Farming News Review - March 2007

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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 2007 US Farm Bill includes subsidy caps for farmers; increased conservation funding; new funding for renewable energy research; support for specialty crop producers to generate increased nutrition; increased payments for new entrants.

CAP (etc.) support details/payments

By the end of February approximately 82 per cent of 2006 claimants had received full or part payments and about 63 per cent of the total monies due had been paid to farmers.
A statement issued by Defra Secretary, David Miliband, has revealed that 25,000 claims in respect of 2005 are still being reviewed by the RPA.
Defra has warned the Treasury that EU fines relating to the operation of the 2005 Single Payment Scheme are likely to total £305 millions.

Grants/regulations/legislation/environment

The NFU has called for set-aside to be abandoned leaving the claimed environmental benefits to be covered by the environmental stewardship schemes.
A report by Manchester Business School has disputed the belief of eco-conscious consumers that organic food production generates environmental benefits.
Defra has announced it is working with the food chain to produce a green standard mark which will allow consumers to be aware of the environmental impact of the product being purchased.
EU member countries have supported a plan of the EU Commission to have a legally binding commitment to 10 per cent biofuel use across the EU by 2020.
NFU Scotland has warned of “crippling and unnecessary” financial bills on Scottish farmers if proposed new restrictions in Scotland’s Nitrate Vulnerable Zones go ahead.
Natural England is advising the Government to introduce legislation to create clear and well managed public access along the entire 2,500 miles of England’s coastline.
Warwick HRI has been awarded grants totalling £1.36 millions by the Biotechnology and Biological Sciences Research Council to fund brassica research.
The Scottish Agricultural College has received a grant of £750,000 from SEERAD to upgrade its beef development and research facilities in Edinburgh.
Pesticides campaigner Georgina Downs has succeeded in her claim to have her legal challenge against Defra’s pesticides policy heard in the High Court. She is claiming that Defra’s approach to pesticides is unlawful and that there has never been a proper risk assessment for the long-term exposure for people who live or work near sprayed fields.

Other matters of farm finance and tenure

Total borrowing in the agricultural sector fell by £18 millions in the final quarter of 2006 to £9.375 billions according to figures released by the Bank of England. However, the reduction fell well short of the usual fall of £300-400 millions at the time of year.
The Royal Institute of Chartered Surveyors latest survey has revealed that average land values rose 18 per cent in the second half of 2006 to £3,300 per acre.
Land agents Brown & Co have announced that land values in Norfolk and Fenland have risen by between 10 and 25 per cent over the past year. Demand is outstripping supply with strong interest from farmers in Ireland and Denmark.
The Elizabeth Finn Care welfare charity has reported that farmers make up the ninth largest group which fall victim to sudden and unexpected poverty.

Product prices

A. Crops

The United States Department of Agriculture have revised their calculations of global wheat and maize production upwards this month which, combined with the relaxation of the Ukrainian export quotas, has contributed to the suppressing effect on the overall grain market this month. Prices of all commodities dropped back marginally over the course of the month, although wheat and barley prices showed signs of recovery near the end. Average prices in late February (£/tonne ex-farm): feed wheat 90, milling wheat 96; feed barley 89; oilseed rape 167; feed peas and beans 93.
Potato prices rose gently in the first half of the month, with a sudden surge in price occurring the latter weeks. Prices closed at £149/tonne, £12 up on the opening price and leaving a £45 gap between current prices and those of a year ago. The unexpected jump is thought to be due to a combination of improved contract prices in both the processing and the packing sectors and increased demand on bagged crop. The premiums seen in recent months for baker-sized tubers have now dropped back as more crop has come to the marketplace. Overall trade remains good as packers and processors call in contracts in line with expectation. At the end of the month King Edwards were achieving between £175 and £205/tonne; up to £220 tonne for top quality. Top grade Maris Piper samples are now achieving £250 to £300/tonne, whilst samples of Estima with high baker content are now only achieving between £180 and £200/tonne.

B. Livestock

The average steer price continued the rising trend seen in the latter half of January, reaching 113p/kg lw in late February; 10p/kg above the price at the end of February 2006.
Lamb prices showed signs of dropping back this month, finishing the month at just below 105p/kg lw, on a par with prices at the same time in 2006.
The average pig price continued the falling trend of the two previous months, dropping from the opening price of 104.5p/kg dw down to 103p/kg dw by the latter stages of February. Any substitution by consumers of pig meat for poultry meat on the back of the bird-flu outbreak is yet to be seen.
Having reached a seasonal peak in November of 19ppl, 0.9ppl lower than the same time last year, average milk prices have dropped back to 18.5ppl. Milk quota is currently trading at 1.30ppl for clean, 4% butterfat holdings.

Other crop news

BASF Plant Science is to conduct a 5 year trial of genetically modified potatoes on a farm hear Hull.
However, UK Greenpeace is calling for the trials to be cancelled after obtaining results from experiments carried out by Russia’s Institute of Nutrition which highlighted links with cancer in laboratory rats.
A report published by the International Service for the Acquisition of Agri-biotech Applications has found that in 2006 developing countries saw a 21 per cent increase in biotech crop production compared to only 9 per cent in industrialised nations.
The first case of potato brown rot in 2007 has been reported in the east of Holland.
A report published by the British Potato Council – “Potatoes, cost of production 2006” – has concluded that producers in France and Holland can produce at a lower cost and withstand longer periods of pressure than UKK producers.
Velcourt and Humber Grain have signed agreements to supply grain to the North Lincolnshire biofuels plant planned by Bioethanol and Centaur Grain.
Both the British Edible Pulse Association and the Processors & Growers Research Organisation are forecasting good results for the pulse sector in 2007 with the expansion of home and overseas markets.
Bayer CropScience’s vegetable seed business, Nunhems, and Unilever have announced a joint project to develop new varieties of tomato for improved taste, nutrition and health.
The first British-made sprout trimming machine has been developed by Holme Farm Foods avoiding the need for growers having to send sprouts to Holland to be trimmed.
Research funded by the Watercress Alliance has claimed that eating watercress daily can protect against cancer.
Fruit First Ltd has been formed to bring together the top-fruit packing businesses of Worldwide Fruit, Richard Hochfeld, Fruit First and Gaskains. A £6 million packing and distribution centre is being built in Faversham, Kent.
Leicester-based manufacturer OVO Products has unveiled a machine designed to clean household fresh produce of all traces of pesticides using ozone and a nature biocide.
A report from Plinsoll Publishing, “Mushrooms – Portfolio Analysis”, has concluded that 29 per cent of UK mushroom businesses are in financial danger with 17 per cent “blatantly selling at a loss”.
The New Zealand 2007 crop estimate for export apples and pears is up by 11 per cent over 2006.

Other livestock news

Reports suggest that turkey sales have fallen by 30 per cent since the outbreak of H5N1 bird flu. Bernard Matthews has reported a 40 per cent fall in turnover and has already laid off 130 staff at its processing plant at Great Witchingham, Norfolk.
Given the strong association of the outbreak of bird flu with the import of infect poultry from Hungary, Defra has come under strong pressure from the NFU to impose tight restrictions on imported meat.
Provisional figures from the Meat and Livestock Commission indicate that exports of meat and livestock products exceeded £1 billion in 2006, the first time in more than 10 years.
The English Beef and Lamb Executive is forecasting an annual decline of between 2 and 3 per cent in the national sheep breeding flock. With lower lambing percentages also forecast, a stronger market is expected in 2007.
Defra has been heavily criticised for its meat purchasing policy for consumption by Government departments. In 2006 40 per cent of beef was sourced from overseas, 75 per cent of bacon, 40 per cent of lamb and 10 per cent of pork.
The All Party Parliamentary Group on Dairy Farming has claimed that poor milk prices paid to dairy farmers by the supermarkets is the result of a “rip-off culture” and not market forces.
Only 900 of the anticipated 1,500 applications for IPPC permits had been received by the 31 January deadline.
Nearly 7,000, or almost 7.5 per cent of the total, of Britain’s herds were caught up in TB movement restrictions in 2006. In some parts of western England the figure was nearly 20 per cent.
Scientists working for Alicon, a Swiss Biotech firm, have reported that BSE-infected cows could pass the disease on to humans through their milk.
BOCM Pauls is to purchase the Gold Medal game feed business of Humphrey Feeds.
C & K Meats and Lambert’s Abattoir has been granted permission for a new abattoir and meat processing plant at Eye, Suffolk after three years of negotiations.
Sunderland-based meat packer Northern Counties Meat has been put into administration causing concerns regarding the financial implications for local auction marts and livestock producers.
Aeron Valley creamery of Lampeter in West Wales is to close at the end of March with the loss of 44 jobs.

Inputs/Supply businesses

Organic Farmers & Growers and the Scottish Organic Producers Association have both approved SEER Rockdust for use by organic growers.

Marketing

An industry-led body, Scotland Food & Drink, has been created to promote Scottish produce and help the farming industry focus on its customer’s needs.
A survey carried out for the English Beef and Lamb Executive has found that more than half of consumers want to see food retailers displaying fresh meat in shelf space separated by country of origin.
Assured Food Standards is raising the profile of the Red Tractor logo among UK consumers by launching the Red Tractor Consumer Media Information Service and a new website aimed at parents and children.
UK-based soft-fruit specialist Berry World has formed Vitalberry BV with Chilean partner VBM, a joint venture fresh fruit and marketing company for continental Europe.

Miscellaneous

The NFU, British Hospitality Association and the Food & Drink Federation have launched the Safe and Local Supplier Approved scheme designed to help small growers which are unable to meet the cost of working towards British Retail Consortium standards. The scheme is intended to provide retail buyers with assurance that produce meets food safety and legal requirements.
A report prepared by English Farming and Food Partnerships has concluded that farmers should work collaboratively with food processors and manufacturers.
A report from the Food Ethics Council has found that people working in food and farming are worse paid and more likely to be killed at work than in other sectors. In 2006 45 farmworkers died in the UK from injuries sustained at work and 400,000 working days were lost as a result of illness and injury.
Reading-based IFIS Publishing has published the 8th edition of the FSTA Thesaurus, the reference material for food science, technology and nutrition.
Chandler & Dunn, the Kent top-fruit grower, has won Gold Award as Edible Grower of Year.
The heads of the new sectors which will make up Levy Board UK are Jonathan Tipples (cereals and oilseeds); John Hall (horticulture); John Cross (beef and lamb, England); Tim Bennett (milk); Stewart Houston (pigs, England); Janet Bainbridge (potatoes).
Salad firm Florette UK has reported a profits increase of 8 per cent in 2006.
Total Produce, the company demerged from Fyffes, has bought UK fresh produce company Redbridge Holdings for £11.5 millions.
Fresh produce processor and distributor Bakkavor Group increased operating profits by 71 per cent in 2006.
The Royal Highland and Agricultural Society of Scotland has announced that, from 2013, the Royal Highland Show will be relocated to Norton Park to enable Edinburgh Airport to expand on to the existing Ingliston show site.
Doubts are being voiced about the ability of the Royal Agricultural Society of England to host this year’s Royal Show after a number of resignations of key personnel.
Alpine Foods, a Dundee-based processing and freezing plant, has gone into administration.
Ivor Robins has been appointed Master of the Worshipful Company of Fruiterers.
Jim McLaren of Perth has been elected president of NFU Scotland.
Lyndon Edwards has been appointed chairman of the Royal Association of British Dairy Farmers.