Farming News Review - March 2009

<< back

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

Other crop news Other livestock news Inputs Marketing Miscellaneous

Policy issues

The policy “think-tank” unit, Chatham House, has issued a new report “Food Futures: Rethinking UK strategy” and concluded that more must be done to safeguard food production, that there is a greater need for better crisis management and that more collaboration is needed between the Government and producers.

CAP (etc.) support details/payments

The Freedom of Information Act has forced the Rural Payments Agency to release individual details of Single Payments made in England from October 2005 to October 2007.
The European Commission has ruled that French government support to producer organisations between 1992 and 2002 to help them deal with surplus production distorted competition. Measures included subsidising prices, the destruction of crops as well as incentives to process produce. The aid has been deemed to be unlawful and more than €330 millions is due to be repaid.

Grants/regulations/legislation/environment

The Environmental Damage Regulations come into force on 1 March. The regulations mean that farmers will need to notify, prevent and remedy damage when the most significant cases of damage to biodiversity, water or land occur.
The European Parliament’s environment committee has issued proposals to revise the Directive on Integrated Pollution Prevention & Control which will extend controls to nurseries with boilers of 20MW or more, a decrease on the current threshold of 50MW. Affected nurseries will have to apply for a permit from the Environment Agency which would carry out regular inspections. Growers are also expected to undertake site assessments, monitor emissions and undertake regular reporting.
Applications for the 2008/09 English Woodland Grant Scheme must be submitted by 31 March to ensure payment.
The Welsh Assembly has announced funding of up to £26 millions to fund technology to turn waste into bio-gas. The bulk of the funding is to go to local authorities to help them develop anaerobic digestion plants as a landfill alternative.
The Gangmasters Licensing Authority is joining forces with local authorities to target rogue gangmasters and deal with the community issues they create. Plans agreed with Nottinghamshire will mean council staff receiving complaints can pass information to the GLA if the issues are connected to gangmaster activity.
Peter Cook, former head of rural business at the Scottish Agricultural College, is to undertake a review of the £1.6 billion Scottish Rural Development Programme.
Defra is to spend over £8 millions over the next 3 years on wildlife projects across the developing world.

Other matters of farm finance and tenure

Total income from farming rose by 36 per cent in 2008 to £3.46 billions in real terms but the annual Farm Business Income survey, which estimates returns to individual farm businesses, predicts that farm income to the end of February 2009 will fall by 8 per cent. Sheep output was up 29 per cent; dairy 22 per cent; poultry 23 per cent; beef 25 per cent; pigs 17 per cent. Cereal values increased by 66 per cent; potatoes 14 per cent. However, inputs rose by 27 per cent; energy 36 per cent; fertilizer 85 per cent; animal feed 38 per cent.
Latest statistics from Defra indicate that the income of vegetable growers will have fallen by a third in the year to February 2009 as a result of a combination of lower prices and higher input costs. Provisional figures show an income per farm of £53,600 in 2008/09 as compared to £81,000 in 2007/08 and £62,200 in 2006/07.
Agricultural borrowing at the end of 2008 fell to £10.71 billions, a reduction of £379 millions or 3.4 per cent since September. However, lending was up by £771 millions or 7.8 per cent since the end of 2007.
The price of equipped farms fell in the fourth quarter of 2008 according to agents Smith Gore. Bare farmland rose to an average of £5,700 per acre, an increase of 2 per cent in the quarter and 8 per cent over the year as a whole but equipped farms fell to an average of £6,800 per acre, down 8 per cent over the quarter and 22 per cent over the year.

Product prices

A. Crops

The International Grains Council has now reported that lower prices coupled with higher input costs is expected to lead to a 1% reduction in world wheat plantings in 2009/10. Little by way of adverse growing conditions worldwide indicates a 2009 crop of 649 million tonnes, 39 million tonnes less than the peak level achieved in 2008. Old crop prices look set to remain low unless growers store right through to the next season as demand is scarce and Black Sea wheat is still available. Export feed barley demand has collapsed and prices in some EU counties are likely to fall below intervention price. Domestic demand will be unable to take up any export surplus. Demand for malting barley is non-existent with beer sales falling due to the recession. Lack of demand for vegetable oil and meal coupled with improved growing conditions has produced a bearish outlook for oilseed rape.
Average prices in late February (£/tonne ex-farm): feed wheat 102, milling wheat 148; feed barley 92; oilseed rape 230; feed peas and beans 134.
The potato market continues to be relatively benign. Demand for low grade material remains strong but supplies in the quality range are becoming shorter as producers await higher prices while stocks are estimated to be 8 per cent up on this time last year. The average price over the month increased marginally from £119 per tonne at the beginning, closing at £122/tonne. King Edward was achieving £110 to £125/tonne, up to £145/tonne for the best samples; Desiree ranged from £125 to £135/tonne; bulk graded Maris Piper was about £95/tonne but best Eastern Counties crop was achieving as much as £155/tonne; Estima was about £120/tonne for mid-range product but better quality material could achieve £160 to £180/tonne.

B. Livestock

The roller-coaster ride of the average steer price continues. Having reached 165p/kg lw in January, slipping by the end of the month to 159p/kg lw, the fall continued at the beginning of February to 155p/kg lw only to recover mid-month to 160/kg lw and then fall back to 156p/kg lw. Dairy values peaked at the beginning of the month at £1,492 per head but slipped during the month to £1,301 per head before staging a recovery to £1,377 per head.
Lamb prices have held up well during the month. Having risen 18 per cent in January, the average price continued to rise, peaking at 167p/kg lw before slipping back at the end of the month to 162p/kg lw but this is still 30 per cent higher than a year ago.
The upward movement in average pig prices continued reaching 138p/kg lw by the end of the month, nearly 25 per cent higher than a year ago.

Other crop news

Consultants Andersons have predicted the area of combining peas will increase this year from 28,000 hectares to 35,000 hectares while field beans will increase from 118,000 hectares to 160,000 hectares.
Potato Council figures indicate that Scottish growers had the highest yielding crops in 2008. The average yield was 45.6 tonnes per hectare compared with 45.1 tonnes per hectare for England and Wales. Scotland now contributes 84 per cent of British seed and 22 per cent of the total potato crop.
High levels of potato virus Y have been found in farm-saved seed potatoes destined for the 2009 crops and have prompted the National Institute of Agricultural Botany to urge potato growers to have seed tested.
The Central Science Laboratory has reported that light leaf spot in oilseed rape is at its highest level since the epidemic of 1995. In the autumn of 2008, light leaf spot affected 9 per cent of crops and 1.8 per cent of plants. Crops in the south-east have been affected at this growth stage for the first time since 1997.
ADAS UK has been awarded a contract to monitor nitrate levels in spinach and lettuce in association with NRM Laboratories, based in Berkshire.
The European Court of Justice has ruled that all GM cultivations must be declared publicly after local authorities in Strasbourg, France refused access to information on GM authorisations in the area.
A new guide about genetically modified food, “Making Sense of GM”, has been published by Sense about Science, a charitable trust. The guide aims to stimulate fresh discussion on genetic modification.
Vivergo Fuels, owned by BP, British Sugar and DuPont, is to build a bioethanol plant at Saltend, near Hull capable of consuming one million tonnes of wheat a year. The plant can produce 420 million litres of bioethanol a year and 500,000 tonnes of high protein animal feed as a co-product. The company has signed exclusive contracts with Frontier to supply the wheat and with KW Trident to market the co-products.
Figures published by the International Service for the Acquisition of Agri-Biotech Applications show that 1.3 million farmers grew biotech crops for the first time in 2008 with almost 11 million hectares of new plantings taking the number of farmers to 13.3 millions growing on 125 million hectares.
Researchers at the John Innes Centre in Norwich are studying changes in the chemical components of pea leaves that could help to develop varieties that need less irrigation.
The British Crop Production Council has criticised the Co-ops “Plan Bee” which prohibits its suppliers from using neonicotinoid insecticides until they are shown to be safe to bees for being reacting to emotion rather than using scientific evidence.
EU apple stocks were 10 per cent higher and pear stocks 23 per cent lower at the beginning of December compared to a year earlier. Higher stocks were held in Poland, the Czech Republic and Denmark and were highest in Italy at 1.4 million tonnes which held almost a third of total EU stocks.
The Freshfel Consumption Monitor 2008, which provides data on trends in the production, trade, supply and estimated per capita consumption of fresh fruit and vegetables across the 27 EU member states, has reported that while UK consumption of fruit is increasing, consumers are still falling short of their recommended 5 A DAY. Production of fruit in 2007 fell by 20 per cent to 2.37 million tonnes. For fruit this represented a 14 per cent increase in the five year average but for vegetables this was 13 per cent below. Imports increased by 1 per cent for fruit and 3 per cent for vegetables, fruit exports fell by 17 per cent whereas vegetable exports increased by 6 per cent.
Researchers at the University of Illinois have developed a new apple, the Wine Crisp, which is resistant to apple scab, the fungal disease that affects apples grown in areas of high humidity and rainfall.
The European Commission has concluded that the legal maximum level of patulin in fresh processed apple juice can remain at 50 parts per billion. It had been thought the limit would be halved.
The European Commission has approved the full payments of sugar restructuring compensation in June. The compensation was originally expected to be paid in two instalments.

Other livestock news

Seven Surrey farmers whose livestock were culled in 2007 as a result of the foot-andmouth outbreak have won out of court of settlements from the Institute of Animal Health and Merial Animal Health.
The Scottish Government has extended the deadline for compulsory vaccination against blue tongue for remote hill flocks to June 30.
AHDB Meat Services figures show that finished cattle prices in 2008 were 26 per cent up on 2007 and 60 per cent up on prices in 1998. Beef production in 2009 is forecast to be down 2 per cent on 2008 at 848,000 tonnes, imports are expected to be static, exports up by 6 per cent but consumption down by 2 per cent.
Eblex has reported that 50 per cent of the retail price of beef was returned to producers in 2008, the highest proportion since 1995. Lamb producers increased their share to 47 per cent but the average retail carcase price was only up 9 per cent on 2007.
Belgian Government vets have confirmed the presence of BTV11, a new virus strain.
The Biotechnology and Biological Sciences Research Council has confirmed it will continue to fund key developments at the Institute of Animal Health after Defra withdrew funding.
Reorganisation of representative bodies in the dairy sector will result in DairyCo working with the NFU on animal health and welfare issues while the Dairy Council will join Dairy UK to lead on dairy health and nutrition promotion.
Dairy Farmers of Britain has announced that liquid milk processing will cease at Portsmouth on 28 February and at Fole on 31 March. Processing will be transferred to Lincoln, Blaydon and Bridgend.
The Scottish Government has reversed its decision to close the funded Bull Hire scheme.
Researchers from Surrey University have reported that people can eat as many eggs as they wish as part of a healthy diet with little effect on cholesterol levels.

Inputs/Supply businesses

Dairyco’s fertilizer monitoring programme shows that blended 20:10:10 compounds fell by 11.6 per cent in January to £366 per tonne. UK ammonium nitrate remained at an average of £381 per tonne. Urea increased by 8.8 per cent to an average of £308 per tonne Overall 20:10:10 and Urea were 54 per cent and 19 per cent up on prices a year earlier.
Bayer CropScience has won approval for fungicide Rudis for use on cabbages and leeks.

Marketing

The Competition Commission has published details of its strengthened code of practice for UK grocery retailers. The Grocery Supply Code of Practice will be included in every contract between grocery retailers and their suppliers; all retailers with groceries turnover in excess of £1 billion will be covered by the Code; retailers will be prohibited from making retrospective adjustments to terms and conditions of supply and prohibited from holding suppliers liable for losses due to shrinkage.
The latest IDG shopper trends survey shows that shoppers who bought organic food in January fell to 19 per cent from a 24 per cent average in 2008; 25 per cent of consumers purchased “Fairtrade” products, three time more than in 2006; the number of shoppers buying locally produced food has doubled in the last 3 years to 27 per cent; the proportion of shoppers who regard country of origin as important increased to 23 per cent, up from 16 per cent in 2006.
The English Farming and Food Partnership’s Retail Food Price Forecast predicts food price inflation down to zero by the end of 2009 despite inflation running at 10.4 per cent at the end of 2008.
Market research specialist TNS has reported that while real household disposable income had increased by 250 per cent in the past 40 years, spending on food as a proportion of income had fallen from 24 per cent to 9 per cent.
The Waste & Resources Action Programme has joined forces with supermarkets to set targets for its “Love Food, Hate Waste” campaign. It hopes to save UK consumers £370 millions by 2010 and reduce the amount of food householders throw away by 155,000 tonnes.
The Advertising Standards Agency has banned a Bpex advert published during its “Pigs are worth it” campaign and also an NFU advert on bovine TB as a result of complaints from Compassion in World Farming and the Badger Trust respectively.
Produce World Ltd is to sell its interests in the Yaxley -based British & Brazilian Ltd to AG Thames Ltd.

Miscellaneous

Richard Macdonald is to stand down as director general of the NFU.
John Torode has stood down as president of the Royal Agricultural Society of England.
The Royal Lancashire Show has been cancelled this year as a result of a dispute between the Royal Lancashire Agricultural Society and the Duchy of Lancaster, landlord of the temporary showground at Myerscough.