Farming News Review - October 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

The first report from the UK’s Council of Food Policy Advisors has proposed that Defra develops a strategy for increasing the consumption of fruit and vegetables through a 5 A DAY task force. It also calls on Defra to identify realistic and sustainable opportunities for increasing domestic production of fruit and vegetables.
The NFU has launched its election manifesto and its “Why Farming Matters More Than Ever” campaign. The new initiative highlights the role of farming in food production, the environment and the economy as well as outlining the steps the industry is taking to meet the challenges it faces in the 21st century.
The European Commission has unveiled a new healthy eating campaign, “Eat it, Drink it, Move it : the EU’s Tasty Bunch”, to fight childhood obesity.

CAP (etc.) support details/payments

The exchange rate for the Single Payment Scheme has been set at 90.93p/€. This is about 15 per cent higher than last year.
Defra has agreed to set a threshold of one hectare for a Single Farm Payment claim. The increase from the existing 0.3 hectare will exclude about 1,500 claimants.
Defra has announced a review of the Rural Payments Agency. The review, which will be conducted by an external contractor, will last about 6 months and cover financial, operational and management activities.

Grants/regulations/legislation/environment

Defra has published “Safeguarding our Soils”, a review of current measures in place to protect soils. It will include a review of cross-compliance requirements and the need for further soil protection options under Environmental Stewardship.
A new partnership has been formed between the Voluntary Initiative and the England Catchment Sensitive Farming Delivery Initiative to promote responsible pesticide use and water protection by farmers.
Defra has indicated that new NVZ regulations may be postponed until 2013 for farms where nitrate levels justify de-designation.
A report released by the Royal Agricultural Society of England prepared by Dr David Garwes, an independent livestock scientist entitled “Reducing Emissions from Livestock”, states that livestock farming and grassland management play a major role in locking up carbon dioxide and regulating the flow of rain into water courses.
Defra’s river quality indicator has indicated that, in England, 72 per cent of rivers were of good biological quality in 2008 while 72 per cent of river length was of good chemical quality. In Wales the equivalent figures were 88 per cent and 95 per cent.
The Carbon Trust is offering grants totalling £250,000 to research, develop and demonstrate low carbon technologies. The work is to cover developing computer software to determine the relationship between materials used in animal feed and energy consumed in the process and trialling more energy efficient press machines.
Defra figures show that land under organic production rose by 9 per cent in 2008, the largest increase being in the pig sector where the number of organic pigs has increased by 50,000 to 71,000.
The Big Lottery Fund’s Local Food Scheme and the North East England Investment Centre are to provide £100,000 to help create North East of England Farmers Markets.

Other matters of farm finance and tenure

The European Commission has agreed that the Agriculture and Horticulture Development Board can pool levy funds to provide support to the Red Tractor scheme.
Average land values rose by 3 per cent in the third quarter of this year according to Savills with arable land increasing by 5 per cent. In the south-east average values increased by 6.4 per cent but there was no movement in Scotland other than in prime arable areas where there was a 4.4 per cent increase. Average grade 3 land values are now £5,000 per acre.
Scottish farm business incomes averaged nearly £40,000 in 2007/08, but ranged from£16,900 for a less favoured area sheep farmer to £70,000 for dairy farmers.

Product prices

A. Crops

With harvest throughout the Northern Hemisphere now complete, more accurate information on yields and quality is replacing previous estimates. The International Grains Council has further increased its estimate of the 2009/10 global wheat yield at 665.5Mt (up half a per cent on the previous prediction; now 3 per cent below 2008/09); furthermore, the US Department of Agriculture concurs with this estimate. The continued weakening of sterling has been instrumental in propping up the UK grain price, which would have sunk lower as a result of the pressure from the high quality and above-average yields Europe-wide. British farmers remain reluctant to market their grain at these prices, hence trade remains slightly stilted. The overall market view, as depicted by the futures prices, is of a grim medium-term; LIFFE wheat futures at the end of September for deliveries in November 2009, 2010 and 2011 respectively were £98 (down £2 from prices at the end of August), £110 (down £4) and £112 (down £8). Average spot prices in late September (£/tonne ex-farm): feed wheat 88, milling wheat 108; feed barley 75; oilseed rape 213; feed peas 110; feed beans 110.
Potato prices remain poor. Having settled slightly at the end of August, the average potato price went on to drop back further in September, reaching a low of £96 per tonne in the latter half of the month. Again the market rallied a little at the end of the month and the price came back to £108 per tonne; 17 per cent below prices a year earlier which sat at £127/tonne. The free market, by comparison, shows the true pressure on those without contract as the price dropped further, reaching a low of £75 but improving late on to close at £85; 27 per cent below the September 2008 price of £118/tonne. With maincrop harvest complete for some and well under way for many others, reported yields are good. However, the market is being driven down by the volumes of crop available; samples that are not expected to store well or crop from growers without adequate storage. At the end of September King Edward were achieving between £100 and £135/ tonne, with best samples achieving £150. Even top quality samples of Estima were obtaining as little as £50 to £80/tonne, whilst Marfona were also changing hands for between £50 and £80/tonne. Romano and Shannon prices stood between £100 and £110 and Maris Piper were achieving from £120 to £150/tonne for highest quality samples.

B. Livestock

Average steer prices relaxed slightly this month, losing 6p/kg from the starting position of 155p/kg, to close at 149p/kg lw; a 4 per cent loss over the course of the month. The average heifer price dropped back by an additional penny to close the month at 155p/kg lw, narrowing the premium over steers to 6p/kg. The average price for dairy cows in late September stood at £1,302 per head, up slightly on August prices.
Lamb prices also weakened over the course of the month, demonstrating a gentle but steady decline. By the end of the month the average UK lamb price was 139p/kg lw (4 per cent down on the price a month earlier). Prices in late September 2008 were 10 per cent lower at 125p/kg lw.
The average pig price continued to follow the seasonal trend by dropping back further this month. By late September the price stood at 149.5p/kg lw (1.5 per cent down on last month’s average but 9.5 per cent above the average price a year ago)
The average farmgate milk price for July (reported in September) finally demonstrated some resilience and was recorded up by almost half a penny at 22.99ppl. The average price a year earlier was 2.83ppl (12 per cent) higher. Milk quota prices, following the improvement seen in August, dropped back again this month to stand at 0.45ppl for clean 4 per cent butterfat holdings.

Other crop news

The annual cereals survey of NFU members suggests that 2009 wheat production will be about 13.9 million tonnes, some 3.4 million tonnes down on 2008 due to decreased yields and lower plantings. Winter barley production is expected to be 2.5 million tonnes, 300,000 tonnes down on 2008 but spring barley is thought to be up by 440,000 tonnes to 3.8 million tonnes. Oilseed rape production is expected to be similar to that of 2008.
Group 4 feed wheats have accounted for two-thirds of seed sales this autumn with Group 3 wheats down to 9 per cent. This is expected to reduce the export potential of the 2010 harvest.
Gleadell Agriculture is to build a new grain drying and storage facility at Great Yarmouth.
A discussion paper put forward by the Food and Agriculture Organisation of the United Nations claims that a boost in crop yields is essential to feed a global population set to increase by 2.3 billions over the next 40 years. The wider adoption of genetically modified crops is expected as the FAO’s paper, “The Technology Challenge”, states that 90 per cent of the increase in production must come from agricultural advances.
Eastern Machinery Ring Straw Services Limited has been established to source 30,000 tonnes of cereal and rape straw for a new straw pelleting plant at Swaffham.
An assessment of the UK potato industry by Plimsoll Publishing has revealed that 83 out of 270 businesses are loss making with 38 making a loss for the second or third year running.
The Co-operative has introduced a new potato, Pioneer, named after the Rochdale Pioneers who founded the movement in 1844.
Five growers in Herefordshire and Staffordshire have joined forces to form Processing Potato Growers to supply potatoes to KP which is owned by United Biscuits.
The Restrain ethylene storage system to combat sprouting in potatoes and onions has won the Potato Europe Innovation Award for 2009.
Greenvale AP has developed a £1 million potato cleaning system at its Tern Hill site. Project Cascade is expected to cut the Tern Hill water consumption from 82 million litres each year to just 18 million litres.
The broccoli season is expected to finish at least 3 weeks early as a result of a lack of rainfall in Lincolnshire.
Positive identification has been made of a new type of downy mildew which affects spinach.
Researchers at Imperial College, funded by the British Heart Foundation, have discovered that Sulforaphane, a chemical found in brassicas, can help to protect arteries from diseases.
Syngenta has advised that turnip saw fly larvae have been discovered on volunteer oilseed rape plants in the south of England.
Initial harvesting of sugar beet is producing sugar levels of 18 per cent, some of the highest levels ever seen at this stage of the season.
The PGRO levy for combining peas and beans is to increase by 10p to 85p and by 20p to 85p for vining peas and broad/green beans in 2010.
The French government is to provide a new national subsidy to its pea, bean and forage legume growers. The subsidy will be paid in the period 2010-2012, will start at £137 per hectare falling to £91 per hectare in 2012.
Wight Salads Group, one of the UK’s leading tomato growers, is to consolidate its activities by selling the Europa Nursery. The site, near Canterbury, includes 28 hectares of land and more than 6 hectares of glass.
English Apples & Pears has downgraded its forecasts of the English apple crop as a result of the very dry weather particularly in Kent. It was originally thought that Cox volumes would be up 5-10 per cent on last year but the forecast has been revised to 5-10 per cent down on 2008. The increase in the Gala crop has been revised down from 16 per cent to 8 per cent.
Worldwide Fruit has announced that the 2009 northern hemisphere Jazz apple crop is expected to be similar to the New Zealand crop with around 5,300 tonnes being available for the UK market.
Organic Farm Foods has become the first wholehead fresh produce supplier to pass the Soil Association’s Ethical Trade Standard. The firm’s apple orchard, Sheepdrove Organic Farms Ltd, and its organic farming operation, Organic Green Orchards Ltd, have both reached the standard.

Other livestock news

Defra has joined with Italy, Holland and Spain in refusing to back France and Germany in calling upon the European Union to freeze milk quotas and increase intervention prices on dairy products.
A report from the European Commission has found that, while the price of dairy commodities has fallen between 18 and 49 per cent since 2007, consumer prices have fallen by only 2 per cent.
The Royal Association of British Dairy Farmers has revealed that UK processors are importing one million litres of liquid milk per day, mainly from Ireland but also from Holland and France.
Promar’s Cost Tracker has put the October 2009 to March 2010 milk cost of production at 26.87 ppl.
Tesco has announced that its Sustainable Dairy Group producers are to be guaranteed 27.37ppl for the next 6 months.
The Environment, Food and Rural Affairs select committee of the House of Commons has started an investigation into the collapse of Dairy Farmers of Britain.
Dairy UK has announced a £7.5 millions investment in the “make mine milk” advertising campaign over the next 3 years.
Genus has announced a 15 per cent increase in profits to £32 millions.
First Milk has announced a loss of £7.1 millions in the year to 31 March 2009.
Robert Wiseman Dairies is to open a new distribution centre at Amesbury, Wiltshire.
Research has suggested that the UK Government’s vision for the CAP would have a damaging effect on Scottish farmers and would result in the beef herd falling by 33 per cent, sheep numbers by 28 per cent, sheep meat prices by 11 per cent and dairy prices by 3.7 per cent.
The European Union’s Standing Committee for Food Chain and Animal Health has agreed to grant Scotland “Officially Tuberculosis-Free” status.
A study led by the Roslin Institute, Edinburgh, has shown that the genetic make-up of cattle can determine their susceptibility to bovine TB.
The latest bovine TB statistics covering the period January to June show 6,504 herds were under restriction, 15 per cent more than in the same period in 2008; there were 2,476 new herd incidents; 20,960 cattle were slaughtered as reactors, a 2.5 per cent increase on 2008.
Provisional Defra figures report that the English pig breeding herd increased by 5.5 per cent in the past 12 months, up by 22,000 animals.
Provisional figures from the 2009 Eblex Business Pointers show the cost of production of the top third lowland sheep producers is £1.48/kg liveweight; less favoured area top third is £1.66/kg; store lamb top third £1.30/kg.
Defra has agreed that farmers will have a choice of an electronic or manual tag for sheep moving direct to slaughter.
NFU Scotland has called for a central database to be created to record sheep movements.
The Department for Agriculture and Rural Development in Northern Ireland has announced the discovery of the human form of swine flu in a herd of pigs, the first such case in Europe.
Although venison is currently eaten by only 8 per cent of the population, a survey undertaken by ADAS has revealed that 91 per cent of consumers would purchase venison in the future.
The Institute of Animal Health is to close its Compton site, near Newbury, as part of the redevelopment of the Pirbright site.
The Anaerobic Digestion and Biogas Association has been formed to lobby politicians and work with farmers and energy companies.
A new biogas digestate standard is to be launched at the European Bioenergy Conference and Expo. The standard will cut the cost of applying for permission to spread slurry on land.
A new web portal “www.bio-gas-info.co.uk” has been launched by the National Non- Food Crop Centre to provide help on biogas, digestate and feedstocks.

Inputs/Supplies Business

EU Ministers have approved the Sustainable Use Directive and Pesticide Authorisation Regulation which will limit the use of pesticides next year.
The European Food Safety Authority has published draft guidance on pesticide exposure assessment. It is intended to be used in EU regulatory risk assessment of pesticides for workers, operatives, bystanders and residents.
The NFU is seeking volunteers to take part in the trial of the “Neighbour Reassurance” scheme for prior notification of crop spraying.
Buglife, a trust dedicated to the conservation of invertebrates, has called for the use of all UK products containing neonicotinoids to be put on hold pending a review. However the NFU has called for an independent and comprehensive assessment of the existing evidence of the impact of neonicotinoids.
Potato fungicide Electis has been given the highest rating for disease pressure by France’s Arvalis Institute.
Systemic fungicide Cercobin WG (thiophanate-methyl) has been granted a specific offlabel approval by the Chemicals Regulation Directorate for use on protected tomato crops.

Marketing

The Organic Trade Board has announced a plan to grow the organics industry by £1 billion by 2015. A 5 year plan identifies the challenges, issues and obstacles to growth that the organic sector faces and what it needs to do to succeed.
Asco Ltd, a new supermarket chain, has opened its first store in Warrington following 18 months of research into the UK grocery retail market. The opening coincides with an opinion poll which has revealed that 56 per cent of shoppers believe there is room for a new multiple.
A parliamentary committee in Dublin has been told that an “absolutely ruthless” Tesco was to blame for the collapse of the Irish Republic’s only large-scale vegetable cooperative. Tesco withdrew its business two months after the co-op had opened a £4.4 millions facility to meet demand.
Suffolk-based Fruit Direct and Kent-based A Salvatori & Son have merged their fruittrading businesses to form FDL Fruit Trading.

Miscellaneous

Mariann Fischer Boel, the European Commissioner for Agriculture and Rural Development, is to retire from politics.
Landmark Systems has developed a link between its Key Accounts software and the Gatekeeper crop management package produced by Farmade Management Systems.
Tractor thefts increased by 150 per cent in 2008 while quad bike thefts increased by 83 per cent. With a recovery rate of less than 5 per cent, the cost of stolen items exceeded £36 millions.
Research from Kingston University claims that farm visits are vital in dispelling children’s misconceptions about where food comes from. The study found that primary schoolchildren confuse sheep and goats and that many believe milk and bread derive from bottles and packets.
Professor Chris Lamb, a director of the John Innes Research Centre, has died aged 59.