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August 2014

Monthly Farming Update

August 2014

I Policy issues 1 A report published by the Environment, Food and Rural Affairs Committee has stated that

retailers must shorten supply chains and growers should extend seasonal production of fruit and vegetables to counter the impact of extreme weather events caused by climate change. The report has demanded Defra gives more robust leadership to make UK food production more resilient for the future through “sustainable intensification”. The UK is only 68 per cent self-sufficient in food which can be produced at home, a fall of 19 per cent over the past 20 years. The committee made further recommendations including putting in place plans for alternative sources of animal feed given the risk of South American soybean supply being diverted to India, China and Asia in general; promotion of the growth of legumes; a detailed plan on how agriculture should reduce its emissions, particularly from the intensive livestock sector; better long term weather forecasting; more precision technology at farm level; cereal yield levels to be addressed as a matter of urgency.

II CAP (etc.) support details/payments 1 The Scottish Government is endeavouring to obtain approval for Scottish farmers to avoid

the crop rotation rules if “equivalence measures” are deployed in 2016.

2 The Welsh Government has announced details of its Rural Development Programme. It will allocate £105 millions to build skills and knowledge through effective training and advice; £143 millions towards a Sustainable Production Grant to provide capital support for farm modernisation and resource efficiencies; £572 millions towards a revamped Glastir scheme; £95 millions towards economic development, tackling rural poverty and promoting social inclusion.

3 Defra is to trial the online CAP application service with a select group of farmers over the next few months.

III Grants/regulations/legislation/environment 1 Defra has announced 15 agri-tech projects which will receive grants totalling £18 millions

to help accelerate agricultural innovation and commercial viability. The projects include technology for an organic natural-based pesticide by Hockley International; breeding lamb for more taste and less waste by scanning live animals by Morrisons; precision application of fertilizer and plant growth compounds by Growhow; use of light to extend the shelf-life of fresh produce by Finlay Flowers; ground and aerial sensors to improve wheat production and breeding by Masstock Arable; antimicrobial technology to control disease in potato production by Advanced Pest Solutions.

2 Following the analysis of 343 pieces of research into the compositional differences between organic and conventional crops, researchers at the University of Newcastle have concluded that organic crops and crop-based foods are up to 60 per cent higher in a number of key antioxidants. It is suggested this is the equivalent of eating one or two extra portions of fruit and vegetables a day.

3 The Sustainable Foods Summit has reported that the global food industry needs to raise production by 60 per cent while reducing the environmental impact by 25 per cent by 2050.

4 £19 millions has been made available under the Farming and Forestry Improvement Scheme covering projects involving animal health and welfare; energy efficiency; nutritional management; water resource management; forestry.

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5 Research undertaken by the University of Warwick has found that deformed wing virus and the parasitic mite Varroa destructor interact to cause lethal damage to honeybees by causing deformity in the bees’ wings rendering them unable to forage.

6 Sir Philip Dilley, formerly executive chairman of Arup, has been appointed chairman of the Environment Agency.

IV Other matters of farm finance and tenure 1 A report entitled “The Square Meal”, compiled by 10 organisations including the RSPB,

Soil Association, National Trust and Compassion in World Farming, claims that UK Farming’s success should be measured by its contribution to improving nutrition, animal welfare and protecting ecosystems rather than productivity.

2 The NFU has been appointed by the Department for Business, Innovation and Skills, under its “Business Focus on Enforcement” initiative, to research farmers’ own experiences of processes and equipment checked and data requested during local authority visits. The Fresh Produce Consortium will have a similar role investigating reports of high or inconsistent charges at ports on imports of perishable produce.

3 The Agricultural Sector (Wales) Act 2014 has been passed creating a degree of protection for agricultural workers in Wales following the abolition of the Agricultural Wages Board.

4 A survey conducted by the National Farm Research Unit has found that 72 per cent of Scottish farmers want to stay in the UK while only 10 per cent are in favour of independence.

V Product prices A. Crops

1 World grain price trends continued to be negative in nature as harvest progressed in the northern hemisphere and some tangible proof, backing up expectations, became available. Milling wheat premiums took a material hit as millers’ concerns were allayed, bringing premiums back from the previously exceptional levels (down to £28/tonne) although harvest rains in mainland Europe may push premiums up if grain quality is lost as a result. Factoring in reports from the US that spring wheat crops are ‘very good’ leads to yet more downward pressure on price. Initial oilseed rape yield results appear marginally above expectation, putting further pressure on prices. Sterling has retained its relatively strong position against the Euro; not assisting with crop export pricing whilst, conversely, this will be assisting with crop input purchasing from Europe. LIFFE feed wheat futures dropped again as the northern hemisphere harvest progressed with good yields being reported. In late July, deliveries for November 2014 and 2015 stood at £122/tonne (down £15) and £135/tonne (down £9) respectively, whilst May 2016 deliveries were down to £143 (down £10). November 2016 deliveries opened this month at £152, but tailed off with the rest of the market to close at £147. Average spot prices in late July (£/tonne ex-farm): feed wheat 111 (-31); milling wheat 139 (-60); feed barley 97 (-6); oilseed rape 225 (-24); feed peas 200 (-15); feed beans 207 (-15).

2 The potato market switched from 2013 crop to 2014 crop this month. The last reported levels for the average and free-buy price were lacklustre: £146 and £109 respectively. At a point in the season when 2014 maincrop harvest has yet to get underway, movements comprise predominantly salad varieties and early maincrop with semi-set skins.

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The average price for 2014 crop was first quoted at the end of July at £161/tonne, with

the free-buy price £30 behind at £131. Growing conditions for 2014 crop development remain favourable but high summer temperatures are leading to mild wilting and susceptibility to disease. 2014 crop prices for grade 1 samples in late July were not readily available, but the following will provide context: Maris Piper with limited skin-set were selling at between £150 and £190 per tonne; Marfona were moving for between £105 and £170, mainly dependent on baker content.

B. Livestock 1 Cattle prices, with a small level of daily fluctuation, held pretty steady this month

recording a small improvement overall. Supply from within the UK remains greater than the corresponding demand at present, but in the longer term this is expected to reverse. The average steer price moved by a few pence in each direction over the month, before closing 2p higher at 177p/kg lw (28p/kg below the average in late July 2013). The average heifer price spent most of the month at or below its opening position, eventually rallying at the month end to close 1p higher at 191p/kg lw; 22p/kg below prices in late July 2013. The average dairy cow price was volatile in July, although predominantly weaker. Having opened at £1,574 per head, the closing position was £256 lower at £1,318 per head (£1,380 a year earlier).

2 Seasonal demand patterns have been the main driver of the average finished lamb price (SQQ), which continued the ‘material reduction’ trend set last month. The interaction between a plentiful supply of finished animals and the lower demand generally seen when temperatures increase has resulted in a 20 per cent drop in average prices. From a starting position of 212p/kg lw, a net drop of 44p/kg left a closing average price of 168p/kg lw; 16p/kg below the average a year earlier.

3 The average pig price (DAPP) dropped by a considerable margin this month, largely pinned to consumer demand being below expectation for the time of the year; at this time last year the average price was at its seasonal peak. From an opening position of 163.7p/kg lw, the average dropped back early on, steadied itself mid-month, then dropped back further in the latter stages to a closing position of 160.9p/kg lw, down 2.8p/kg over all and 7.4p/kg below the prior year comparative.

4 The UK average milk price for June (published in late July) suffered an additional reduction of 0.29ppl, having lost a full penny in May, bringing the price back to 31.98ppl to stand 1.26ppl above the average a year earlier (30.72ppl). The UK average milk price for May, despite a reduction in the month, improved in the EU28 rankings to sit in13th place, 0.60ppl above the EU28 weighted average of 31.76ppl. Milk quota prices seemed to reach equilibrium this month after the volatility seen in recent months In late July quota (clean, 4% butterfat holdings) was trading at 0.24ppl; 0.03ppl below last month’s close and 0.06ppl below the average a year earlier.

VI Other crop news 1 Initial results from HCGA oilseed rape trials conducted in the East/West region show

average yields of 2.3 tonnes per acre, above the four-year average of 2.2 tonnes per acre. Initial results from winter barley trials report yields of 4.1 tonnes per acre compared to the five-year average of 3.6 tonnes per acre.

2 The AHDB/HGCA planting and variety survey estimates suggest the cereals and oilseed rape planted area in Great Britain is 9.66m acres, an increase of 6 per cent on 2013. Wheat is up 22 per cent at 4.8m, barley and oats are down while the oilseed rape area is static.

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3 HGCA has announced that it is to change the nitrogen protocol in feed barley trials and also set a common yield target for two-row, six-row and six-row hybrid varieties to ensure the Recommended List for winter barley provides the best possible information to growers.

4 The International Wheat Genome Sequencing Consortium has published the Chromosome Survey Sequence in respect of the bread wheat genome.

5 Blackman Agriculture has introduced Belipi, a soft endosperm feed wheat with a sowing window of mid-October to April. The variety is very vigorous in spring helping to out compete black-grass, is resistant to wheat orange blossom midge and has good resistance to septoria tritici and mildew.

6 Monsanto has bred V3160L, a new Vistive variety, which it claims has the same yield potential as Incentive. It expects the variety to be included in the Recommended List for 2015/16.

7 The Processors’ and Growers’ Research Organisation, Stockbridge Technology Centre and John Innes Centre are conducting a research project into the race structure of pea downy mildew with a view of developing varieties with improved resistance.

8 The Processors and Growers Research Organisation has published advice on the desiccation of combining peas and field beans.

9 The Potato Council has published “A Fresh Challenge: Addressing the volume decline.” In the year to May, potato sales fell by 8 per cent by volume despite a 3.8 per cent increase in value overall. Planting estimates for the 2014 crop show a fall of 2.1 per cent.

10 British Sugar and the NFU have agreed the price for the 2015/16 sugar beet crop as being £24 per tonne, a fall of £7.67 per tonne. The reduction is a result of a significant fall in commodity prices and very high sugar stocks.

11 A three-year project at the University of Newcastle, commissioned by the British Carrot Growers Association, will measure the effects of eating carrots, parsnips and celeriac on biomarkers for cancer and inflammatory diseases.

12 A study at Harper Adams University has found that high rainfall can cause up to 65 per cent losses due to splitting. Growing radishes in ground with a low water content can reduce splitting to only 2 per cent.

13 Florette is to increase its protected growing area in Essex in its joint venture with Jepco by a further 9 hectares adding to the existing 11 hectares with a further 20 hectares planned. The area is used to produce lamb’s lettuce and other baby leaf varieties.

14 An industry-led consortium involving Worldwide Fruit and East Malling Services is to create a new apple-breeding programme with the aim of “worldwide commercialisation” of new varieties. The project will direct the selection, trialling and evaluation of promising material, supported by a pre-breeding research programme to develop markers for quality and disease resistance. The programme will also cover flavour, main-season fruiting, storage ability and shelf life and a tree architecture suitable for modern orchards.

VII Other livestock news 1 A study conducted by the University of Warwick has concluded that culling badgers will

have little impact on the spread of bovine TB and that whole herd slaughter was necessary. It suggests that most herd outbreaks have been caused by multiple transmission routes with the main cause of infection being flawed cattle TB tests which failed to pick up infection. It further claims that 84 per cent of new infections were caused by animal movements with just 10 per cent of farms responsible for virtually all these infections. The report concludes that badger culling would reduce bovine TB in cattle by about 6 per cent.

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2 The Animal Health and Veterinary Laboratories Agency has reported that, in 2013, there were 4,068 extra herd tests for bovine TB resulting from the switch to two routine testing areas – annual and four-yearly; there were 1,012 extra herd skin tests for the edge area, mainly due to radial 3km tests around outbreaks; there were 1,112 extra tests in the low risk area due to radial 3km testing.

3 The Animal Health and Veterinary Laboratories Agency has proposed that farmers should bear a greater share of the cost of bovine TB testing.

4 Following changes made by Defra to the policy of bovine TB pilot culls, the British Veterinary Society has confirmed its support.

5 Defra has confirmed that a new Badger Edge Vaccination Scheme will be launched later this year.

6 Defra is to reopen the £250,000 2014 Badger Vaccination Fund but is limiting it to the edge area.

7 The Animal Health and Veterinary Laboratories Agency has issued invitation-to-tenders for seven delivery partners to provide veterinary services in England and Wales. The British Veterinary Association has warned that local vets could become disengaged from matters such as TB management.

8 Defra’s TB Eradication Advisory Group is considering introducing “risk-based TB testing” so as to target herds considered to be most at risk. It is reviewing whether the tests could be triggered by linking BCMS cattle movement records with TB testing data on the SAM system maintained by the Animal Health and Veterinary Laboratory Agency.

9 The NFU is to combine with the British Meat Processors Association and the Association of Independent Meat Suppliers to establish a code of practice to increase transparency in the beef supply chain in England and Wales.

10 The ABP Food Group is to introduce video image analysis at its Perth abattoir, the first time the system has been used to grade cattle in Great Britain.

11 The Pasture-Fed Livestock Association, formed 3 years ago, is seeking more suppliers who produce beef and lamb solely on pasture and conserved forage.

12 The Morrisons Farming App has been launched, aimed primarily at beef producers, as an aid to livestock management.

13 Waitrose has raised the minimum price paid to its beef producers by 5p/kg to £3.45/kg.

14 Rabobank has claimed the beef price will recover once the current high supply situation has passed but it has a cautious view of the longer term.

15 Rabobank has forecast falls in UK farmgate milk prices as a result of a glut of milk caused by production in the May-July period being 6-7 per cent above the norm. The last Global Dairy Trade auction on 14 July saw prices 8.9 per cent below the previous auction and at their lowest for 18 months.

16 Arla has reduced its Europe-wide milk price by 1.25 € cents per kg which will translate to a 0.94ppl cut for UK producers.

17 Dairy Crest is to join forces with Fonterra to market whey powder from its Davidstow creamery. Dairy Crest will also invest £20 millions at Davidstow to produce galacto-oligosaccharide, a lactose-based prebiotic used in infant formula.

18 First Milk has reduced its liquid pool price by 1.75ppl to 28.775ppl while its manufacturing pool price has been reduced by 1.25ppl to 29.6ppl.

19 Adams Food Ingredients has acquired the assets of FoodTec UK from Dairy Crest.

20 Muller Wiseman has reduced its standard price by 1.2ppl to 30.8ppl.

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21 Meadow Foods has taken on 17 dairy farms following the closure of Rock Farm Dairy in Durham.

22 Food Animal Initiative has produced analysis which demonstrates that regular mobility scoring can help farmers detect and tackle dairy cattle lameness earlier in addition to reducing associated production losses.

23 A survey “Your Voice, Your Future”, produced on behalf of Coleg Sir Gar’s dairy development centre, has revealed that 52 per cent of respondents intend to increase milk production over the next 5 years while only 5 per cent expect to leave the industry; 65 per cent of farms with 200 or more cows intend to grow; 73 per cent of farmers under 40 are seeking to expand; 36 per cent of farmers aged between 60-65 plan to increase production. Analysis of the survey suggests that Welsh milk production will increase by 20 per cent over the next 5 years.

24 Dairy Crest has reduced its standard liquid and Davidstow contract prices by 1.1ppl. This reduces the Davidstow contract price to 32.1ppl and the standard liquid price to 30.1ppl.

25 The National Sheep Association and the NFU have published a report “A Vision for British Lamb Production.” The report highlights the opportunities for the sector to meet global demand for sheepmeat. The UK exports 36 per cent of annual production with over 50 per cent going to France. But home consumption has fallen from 7.5kg per person in 1990 to only 1.9kg per person today.

26 A study conducted by the University of Bristol’s School of Veterinary Sciences has revealed that a sheep’s experiences shortly after birth can define its later behaviour and that of its offspring.

27 A Bio-Sciences KTN-funded project supported by Eblex will result in inbreeding values being available to all registered Suffolk, Texel and Hampshire breeders.

28 Germinal Seeds has produced a new booklet, the Forage Options Advisory Guide, providing guidance on how to grow, manage and use an alternative range of forage crops.

29 The first ever UK case of livestock-associated methicillin-resistant staphylococcus aureus (LA-MRSA) has been reported in a post-weaning piglet in Northern Ireland.

VIII Inputs/Supply businesses 1 The Environmental Audit Committee has responded to Defra’s National Pollinator

Strategy by urging the Government to accept the current EU suspension of neonicotinoid seed treatments, claiming it was the “right approach, given the requirements of the precautionary principle.”

2 Researchers from the University of Manchester and Radboud University in the Netherlands have spent 3 years examining the impact of triazole fungicides, which are under threat from EU regulation, on resistance of the fungus Aspergillus to “life-saving” human drugs. No resistance was found in 290 air and soil samples from inner city sites across Greather Manchester but found 1.7 per cent resistance in 230 samples from rural sites in West Yorkshire.

3 Syngenta has withdrawn an application for the emergency use of its neonicotinoid seed treatment on Cruiser oilseed rape. Meanwhile Bayer CropScience is awaiting a decision from the Chemicals Regulation Directorate for autumn use of neonicotinoid Biscaya (thiacloprid) to control the aphid vector of turnip yellow virus in oilseed rape. Biscaya is currently approved for spring use for the control of pollen beetle.

4 Syngenta has introduced a new fungicide, Geoxe, to provide broad-spectrum protection against storage rot pathogens in top fruit.

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5 The Potato Industry CIPC Stewardship Group has announced new statutory product label changes while new application rates have been approved by the Chemicals Regulation Directorate.

IX Marketing

1 A poll conducted by YouGov, based upon 574 industry responses, has revealed that only one in six supermarket suppliers and trade associations consider that supermarket buying practices have improved since the Groceries Code Adjudicator was appointed.

2 Red Tractor Assurance has released its new 2014 standards. Only one risk assessment is now required for a single business. Changes include, for the beef and lamb scheme, the use of prescription medicines must result in a veterinary visit at least once a year; for the combinable crops and sugar beet scheme, mycotoxin risk assessments must be carried out for the current growing season and for each field of wheat; for the dairy scheme, calves must be given two milk feeds per day until 28 days old and purchased supplements must be manufactured by a UFAS or equivalent compounder; for the pig scheme, producers must annually review the use of antibiotics with a vet. All licensees must provie a rodenticide bait plan including a map of all bait points.

3 The Government has published “The Plan for Public Procurement” covering new food and drink buying criteria. The plan encourages the public sector to serve more locally sourced fruit, vegetables and meats through local suppliers.

4 Latest figures from Eblex show that British lamb accounted for 71 per cent of total lamb volumes at retailers in June compared to 66 per cent in June 2013 while British beef made up 85 per cent compared to 82 per cent a year ago.

5 The Food Standards Agency has deferred a decision on whether to allow raw milk to be sold more widely.

6 Dairy Crest brands Cathedral City, Country Life and Frijj all grew by 5 per cent in the three months to 30 June but sales of Clover continued to fall.

7 Justin King has stepped down as CEO of Sainsbury’s to be succeeded by commercial director Mike Coupe while Philip Clarke, CEO of Tesco, is to be replaced by Dave Lewis of Unilever.

X Miscellaneous 1 Liz Truss MP for South West Norfolk, is the new Secretary of State at Defra. 2 Welsh Assembly Environment Minister, Alan Davies, has been sacked for exerting

pressure on civil servants for private information about opposition members. 3 New Holland has unveiled the CR10 90, it claims it to be the world’s highest capacity

rotary combine harvester. It is fitted with a 16-litre, six cylinder in-line Tier B engine with a maximum output of 652hp and has a 14,500 litre grain tank.

4 In the year to March there were 27 fatalities in the agricultural sector, lower than the average of 33 for the past 5 years.

5 The Royal Lancashire Show is expected to be resurrected in 2015. 6 The Global Forum for Innovations in Agriculture, the largest to cover the future of

sustainable agriculture, will take place in Abu Dhabi next March. 7 Andrew Naylor has been appointed director of agriculture at Lloyds Bank. 8 M Baker Produce of Lincolnshire has been fined £100,000 for breaches of health and

safety procedures following the death of a worker in a tractor accident.

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Postscripts The Wit (and Wisdom) of Phyllis Diller Whatever you may look like, marry a man your own age. As your beauty fades, so will his eyesight. Housework can’t kill you, but why take a chance? Cleaning your house while your kids are still growing up is like shovelling the path before it stops snowing. A smile is a curve that sets everything straight. The reason women don’t play football is because 11 of them would never wear the same outfit in public. Best way to get rid of kitchen odours: Eat out. A bachelor is a guy who never made the same mistake once. I want my children to have all the things I couldn’t afford. Then I want to move in with them. Most children threaten at times to run away from home. This is the only thing that keeps some parents going. We spend the first twelve months of our children’s lives teaching them to walk and talk and the next twelve years telling them to sit down and shut up.

This report is intended as a general guide and although Chavereys have made every effort to ensure accuracy they cannot accept liability for any errors of fact or opinion. © Chavereys

Monthly Farming Update

It’s Mr Smith. He’s on his combine! In the good old days, farmers and their advisers would, or should have had, a close relationship for 10½ months of the year. But once the combine rolled into the winter barley the relationship would be severed. The farmer would get on with reaping his crop while the adviser would enter what he thought was a period of eternal peace. The backlog of work would be cleared, the desk would be seen for the first time in ages, for some thoughts would turn to buckets and spades. Then some idiot invented the mobile phone and another invented email. The farmer on the combine has to await the return of the grain trailer. Maybe he commands the grain trailer awaiting a full combine. Either way he has a brief period of peace. His thoughts turn to the bigger picture. Good to have a chat with the adviser! It get worse. Quite rightly one is not permitted to hold a mobile phone while driving on public roads. So the in-car phone was invented. But what is good for the car is good for the combine. So now Mr Smith can happily harvest his crop while talking to his adviser at the same time. But what do we have? Communication. Too many advisers have absolutely no idea about the real lives of their clients. They are just a file in the rack, an icon on the computer screen. The adviser is there to give “advice”. How can advice be given if there is no understanding of the life and work of the client? Communication is a two way process. You inform, you listen. The farmer informs, the adviser listens. The adviser informs, the farmer listens. Without communication we have nothing. Everybody is in the dark. So perhaps mobile phones and email aren’t so bad after all. I am now off to find a place where there is no signal!! Back in September!!

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