Farming News Review - May 2009

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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

Agriculture Ministers from the G8 group of countries have called for increased investment in agriculture and new frameworks to protect the food market from price volatility. The Ministers want an end to protectionism and an investigation into establishing a stockpiling system for key commodities.
Euro-MPs have approved measures which will allow farmers to deal with animal byproducts not intended for human consumption, allowing them to be used in combustion, with extra incentives to convert mass into biogas. Farmers in the Scottish Highlands and Islands will be allowed to continue burying fallen stock on-farm.
Talks between the European Parliament, the Council of Ministers and the European
Commission on the Working Time Directive, which have been ongoing for over five
years, have collapsed.

CAP (etc.) support details/payments

The European Commission has published its strategy to change the way Less Favoured Areas status is awarded. The Commission has proposed eight indicators for which certain thresholds will be used to determine if support is justified. Climate indicators will be based on heat stress and low temperature. Soil indicators will be based on soil moisture balance; soil drainage; soil texture and stoniness; rooting depth; chemical properties; slope. Farmers would only have to fulfil one criteria.
Defra has opened a consultation period with a view to setting a minimum size for a holding eligible for the Single Payment Scheme.Grants/regulations/legislation/environment

The Waste & Resources Action Programme has welcomed the Budget announcement of an extra £10 millions for building plants to convert food waste into agricultural products. The funding will finance composting and anaerobic digestion machines processing an additional 300,000 tonnes of food waste each year.
The Environment Agency has claimed that greenhouse gas emissions of over 3 million tonnes of carbon dioxide could be saved by 2020 if good practice is followed. Using energy crops and waste as fuel for generating electricity and heat could play a major role in meeting climate change targets.
Following lobbying by the National Farmers Union and the National Sheep Association, the Home Office has agreed to fast-track sheep shearers through the immigration system to help avoid a major shortage of workers this summer.
The Association of Labour Providers has asked the European Commission to commence legal action against the UK Government following the decision to extend the workers’ registration scheme for two further years.
As a result of a tightening of rules, Herefordshire County Council has published new guidance to growers who wish to gain planning approval for polytunnels. It is estimated the cost of seeking approval could be as much as £20,000-30,000.
The National Trust has secured £268,000 of match-funding from Natural England’s Countdown 2010 Biodiversity Action fund to fund a new project aiming to halt the loss of traditional orchards across England.
The Co-operative Group has signed up to Evolve Energy with the aim of achieving a 25 per cent in energy use across the group.

Other matters of farm finance and tenure

The Government has confirmed that the Enterprise Finance Guarantee scheme applies to farming thereby making funds available where credit is scarce.
While the value of English farmland fell by 2.6 per cent in the first quarter of 2009, the third successive quarterly fall, the average value remains 1 per cent higher than it was a year ago. The latest figures from Knight Frank record an average of £4,673 per acre.
Average farm business tenancy rents on dairy farms increased by 23.8 per cent between 2007 and 2008 according to data published by the Royal Institution of Chartered Surveyors while average rents under 1986 Act tenancies rose by 9.2 per cent.
Agricultural Property Relief has been extended in the Budget to the whole of the European Economic area.

Product prices

A. Crops

EU-27 2009 crop estimates from Strategie Grains in April remain unchanged from those published in March. However, April has seen many different market forces in play: reports of dry conditions in China and Southern USA (having a positive effect on prices) have been counteracted by the strengthening of Sterling and reports of a material increase in spring wheat acreage in Canada. The net effect has been steady cereal prices. Moving forward, it can be expected that volatile exchange rates between Sterling, Dollar and Euro are likely to have a marked effect throughout the season. The oilseed market has seen movement this month, with the price strengthening throughout April as news of poor Malaysia palm oil production, a poor Argentinean soyabean harvest and increasing demand for soya from China all came in to play. LIFFE wheat futures reflected the market learning bad news earlier than good, as prices dropped back before strengthening again. At the end of April, deliveries in November 2009 and 2010 respectively stood at £122 (up £1) and £126 (down £3). Average prices in late April (£/tonne ex-farm): feed wheat 102, milling wheat 142; feed
barley 88; oilseed rape 256; feed peas and beans 165. Average prices in late March (£/tonne ex-farm): feed wheat 102, milling wheat 149; feed barley 91; oilseed rape 243; feed peas and beans 132.
Average potato prices grew steadily throughout April. Whilst growth was initially on the back of the Easter holiday season, the trend continued on to the end of the month. Demand for the packing and processing sectors has now started to firm up, but sourcing continues to be largely through contracted tonnages. As the season progresses, demand for top quality material continues to build as the market is slowly being overloaded with value-pack quality samples. Planting of the 2009 crop is well under way across the UK, with many growers in the South finished earlier than expected; it is estimated that over 97,000 ha have been planted so far this season. The average price grew from£123/tonne to £131/tonne, which is 25 per cent below prices twelve months earlier. £7 was also added to the free market average by the end of the month, to close at £125/tonne.
At the end of April King Edward was achieving £145 to £160/tonne for average samples, with best samples reaching £200/tonne. The Desiree market held steady, with prices from £120 to £135/tonne (£160 for best). Estima continued to have a wide price range, with whole crop achieving between £110 and £150, depending on baker content. Maris Piper prices again were quite varied, to reflect the range in quality; demand for general pack quality remained firm at between £120 and £140/tonne (£170 to £180 for grade 1).

B. Livestock

Average steer prices increased early on to reach a peak of 160p/kg lw, but this held only for a short period as by the middle of the month prices were back down to 154p/kg lw where, after a small amount of fluctuation, it held until close, 7 per cent above prices a year earlier. Average heifer prices maintain the premium over steers which at the end of the month stood at 2p/kg lw. Dairy cows in late April were achieving an average price of £1,380 per head, an increase on March’s close.
Lamb prices, continued to strengthen over the first half of the month, peaking above 195p/kg lw, but the latter part of the month saw prices drop back almost to where they started. The UK average lamb price at end of the month stood at 175p/kg lw, 24 per cent above prices at the end of April 2008.
Average pig prices maintained the strong growth seen since January, reaching 150p/kg lw in late April. This represents a 5 per cent increase on last month and a 26 per cent increase on last year.
The average farmgate milk price for February (reported in April) recorded a full penny (4 per cent) being wiped off the average price, bringing it down to 24.52ppl. By comparison this sits 1.1ppl below prices a year ago. Reports this month confirmed that the 2008/09 milk year was the UK’s lowest annual output since 1971/72. Average milk quota prices demonstrated resilience, following last month’s sharp fall, with a 25 per cent rise to close at 0.25ppl for clean holdings (4% butterfat).

Other crop news

A report published by the Home Grown Cereals Authority suggests that European legislation to improve water quality could cost UK arable farmers £900 millions through the loss of key pesticides. A reduction in black-grass control could cost over £500 millions; reduction in rye-grass control £200 millions; reduction in meadow-grass control £89 millions; loss of septoria control £57 millions; inability to control slugs £50 millions.
Defra is to commit £10 millions to a joint action plan involving the Biotechnology and Biological Sciences Research Council, the Natural Environment Research Council, the Wellcome Trust and the Scottish Government the aim of which is to protect the health of bees and other insect pollinators.
The National Farmers Union claims that if wheat exports were transferred to bioethanol refineries, the UK would meet its 5 per cent renewable fuel target.
Greenvale AP has introduced an “environmentally friendly” potato. Vales Sovereign has a lower carbon footprint than traditional varieties as it requires less water and fertilizer with which to grow.
East Malling Research Station and STC Research Foundation have signed an agreement to provide integrated applied science resources to the horticulture industry.
Defra and the Food & Environment Research Agency are to fund a three year project to study the likely impact of climate change on diseases affecting strawberries. Around 300 growers are to take part in the study.
BerryWorld has launched Viva Patricia, a new variety of strawberry bred under the Edward Vinson breeding programme in Spain but targeted at the UK market.
A five-year EU project, ISA Fruit, has been launched aiming to reverse the decline in fruit consumption. The project is expected to cost £12.8 millions and involve more than 300 researchers at 40 research centres in 16 countries.
The Fruit Industry Federation in Northern Ireland has applied for protected geographical indicator status for Armagh Bramley applies. The move has been criticised by English Apples and Pears which believes the Bramley industry as a whole should work together to promote the apple.
Sainsbury’s has unveiled its East Malling Concept Orchard as part of its pledge to increase English top-fruit production. The orchard should produce its first fruit in 2010 and will evaluate four different planting systems. The aim is to demonstrate that it is possible to increase productivity per hectare in the UK and make pear-growing an attractive commercial proposition for English growers.
Trials carried out by East Malling Research Station have found that it is possible to extend the storage session of English-grown Braeburn from early March until late April.
Waitrose is to grow six ancient varieties of English apples on 3,000 trees on its farm in Hampshire with a view to selling the crops within three years. Ashmeads Kernel, Adams Pearmain, Pixie, Sunset, Chivers Delight and Kidd’s Orange Red are expected to generate about 80 tonnes annually.
The number of people struck by allergies to fruit and vegetables has risen dramatically to more than 8,000 per year according to Dr Pamela Ewan, an allergy consultant at Addenbrooke’s Hospital in Cambridge.

Other livestock news

In January, 4,572 cattle were victims of bovine TB across Great Britain, a 34 per cent increase on January 2008. The number of farms placed under a TB2 restriction was up by 27 per cent to 4,327. There were 521 new herd incidents, up 10 per cent on January 2008.
A three-month consultation on the proposed Tuberculosis Eradication (Wales) Order 2009, under the Animal Health Act 1981, has started in Wales.
Researchers from the Scottish Agricultural College and the University of York have found that cattle deemed to be more “curious and social” in a herd pose a higher bovine TB risk.
Defra is to introduce a two stage testing regime for imported sheep and cattle in an attempt to prevent the bluetongue virus from coming into the UK from the Continent. Animals will be tested one or two days after arrival and again seven days later.
Defra figures report that incidence of classical scrapie in the national sheep flock has fallen to the lowest levels in modern times with only eight cases being identified in 2008 and only two cases so far in 2009.
International science-based service company, the Laboratory of the Government Chemist, has opened a new BSE testing laboratory at the Exeter University Innovation Centre.
The Co-operative Group, which is the second biggest liquid milk buyer behind Tesco, has awarded its 339 million litre fresh milk contract to Wiseman, Dairy Crest and Yeo Valley. Dairy Farmers of Britain will lose its 130 million litre contract, this amounts to about onethird of its liquid volume sales.
Milk Link has reduced members’ milk price for May by 1ppl to a standard price of 23.95ppl while Dairy Crest has cut its liquid and milk-for-cheese prices by 0.85ppl and 0.5ppl respectively.
Milk Link has won a contract to supply Stilton and Cheddar to Yili, a leading Chinese dairy company.
Defra has been forced to rethink its policy on fallen stock on the Isle of Wight after a judge at Portsmouth Crown Court threw out a prosecution brought against two farmers in 2007. The judge ruled that Defra had failed in its legal duty to provide the necessary infrastructure to enable farmers to dispose of fallen stock at reasonable cost.
The Food Standards Agency is to increase meat inspection charges by 4 per cent as well as introducing a new time-based charging regime. However it is possible the increase will be vetoed by the Scottish Government.
The National Farmers Union has decided to support Devon dairy farmer David Partridge in his appeal to the House of Lords over the cattle table valuation scheme.
The National Pig Association has claimed that up to 600 small-scale pig producers may have to comply with EU pollution rules in the light of plans to extend the scope of the Integrated Pollution Prevention and Control Directive. The problem revolves around new “nitrogen excretion equivalency” rates. It is estimated the cost to each farm could be as much as £25,000 in the first year.
ABM, together with Eblex, have developed a hand-held “residency calculator” which enables beef and lamb producers to ensure livestock meet the assurance residence period required by the beef and lamb farm standard.
CWG has unveiled the “extra4wool” scheme which could effectively double the value of the wool clip of its 4,100 wool suppliers. The Group will also divert 2.5 per cent of any increased sales revenue to a fund to promote British lamb

Inputs/Supply businesses

Almost half of the 25 chemical pesticides used in organic production have not been approved by the EU under Annex 1 of the 91/414 directive.
Agrisense-BCS has been granted the Queen’s Award for Enterprise in the international trade category for the third time in its history. The company develops and manufactures insect pest monitoring and control systems and devices which use pheromones or other attractants.

Marketing

The Competition Commission has begun a public consultation on the proposal for a supermarket ombudsman to observe and implement the Groceries Supply Code of Practice. The exercise has been branded “pointless” by the Association of Convenience Stores and criticised by the British Retail Consortium but welcomed by the National Farmers Union.
Tesco has changed the name of its fruit and vegetable farm accreditation scheme from Nature’s Choice to Nurture.
The latest Organic Market Report, published by the Soil Association, reveals that sales have been hit across all sectors. UK sales of organic products increased by 1.7 per cent in 2008 to over £2.1 billions, sales through multiple retailers increased by 1.8 per cent to£1.54 billions while sales through independent retailers increased by 1.4 per cent to £568 millions. Sales through farmers’ markets increased by 18 per cent to £23.7 millions. However, these increases are modest in the context of overall food price rises.
The Fresh Produce Consortium is calling on the Government for compensation for losses incurred due to failures of the national PEACH system for imports.
Herb grower Scotherbs has been selected to benefit from a new business development programme launched by the Scottish government. The six-month scheme will introduce a number of growers to Sainsbury’s buyers and give them access to market information and marketing consultants.
The European Commission is inviting art and design students across Europe to enter the EU-wide organic logo competition, the winner of which will feature as the official logo for organic products throughout the EU from July 2010.
Total Produce plc has acquired 50 per cent of soft-fruit specialist ASF Holland BV, based in Venlo in the Netherlands.

Miscellaneous

1 Anglia Business Solutions, a leading supplier of management systems to the fresh-food industry, has bought Norwich-based Supply Chain Systems.
NFU President Peter Kendall has been re-elected vice-president of COPA, the organisation which represents European farmers.
Jack Davies of the Farmers Guardian has been named as the Guild of Agricultural Journalists’ NOAH Writer/Broadcaster of the Year for 2008.
The National Centre for Food Manufacturing has been officially opened at the University of Lincoln’s Holbeach campus.
The election of a new NFU vice-president, following the resignation of Paul Temple, has been deferred until February 2010.
Total Control Systems, which specialises in supply chain management, has gone into administration.
Hemcore, the hemp processing company, has been placed in administration.