Agrifacts April 2023

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Agrifacts | April 2023

Your monthly roundup of news, prices and other farming matters |

Market Report

Recently the grain market seems to be eating a big piece of humble pie. Old crop markets have dropped (say it quickly and it doesn’t sound as bad) over £150/t on wheat and over £370/t on OSR in less than a year. This is the strongest and fastest market fall in history. The last few weeks have seen markets look pretty hairy at times with May 23 futures hitting £190/t.

Although the highs seen in Spring 2022 seem a distant memory now, values still remain relatively high and continue to recover from recent lows. A slight positive to marketeers is that volatility looks to stay and the benefit of this is that they present opportunities, these conditions highlight the need to be proactive rather than reactive to seize these opportunities as they arise.

The story of old and new crop feed wheat seem to be taking very different paths. The oversupply of old crop is now becoming very apparent. Domestic demand has been reduced, a reduction in pigs and poultry plus economic downturn are the big contributors. Export programs have been active, just not as active as we would have liked to see the surplus cleared. Many buyers, both end users and merchants are starting to fulfil their end of season trading book. End users do keep surprising us by jumping in and out of the market, taking cover when they need it. This has resulted in some interesting market dynamics of late, if you can hit it on the right day when demand is there larger premiums can be achieved, other days finding buyers can be a challenge.

We are regularly seeing old crop wheat listings coming forward and receiving multiple bids, demonstrating a huge variability in buying appetite. It isn’t uncommon to see spreads of £15/t (the difference between the highest and lowest bids offered by different grain buyers), these buyers rotate quickly so it shows that throwing the net out wide when gathering prices from multiple buyers is beneficial, keep revisiting the market and don’t think all is lost when you see the futures take a nosedive.

Going against what we would normally expect to see is new crop wheat trading at a significant premium to old crop values, this would normally trade at a discount. This premium continues to widen with a £16/t premium between the May 23 and Nov 23 positions at the time of writing.

As we enter into April there are a number of questions extending to geopolitics, weather and the economy. Traders are hesitant on direction juggling US weather concerns which are currently very cold, hampering drilling efforts and poor crop condition ratings, to uncharacteristically dry weather in Argentina. The remainder of the globe conditions are generally positive, particularly Europe and Australia. Poor economic data is leading to concerns over a potential drop in demand, both in the UK and across the globe.

The biggest issue is that of Putin. Problems in the Black Sea are far from over with two main areas of concern. Russian market intervention and the renewal of the grain corridor on 18 May. Russia has set a minimum price they will allow wheat to be exported for, effectively setting a bottom in the market. There are also questions being raised over their ability to produce the volumes we are used to, recently announcing a 37MMT reduction in the 2023 grain production figures, this could easily extend further if access to supplies and machinery are hampered.

The grain deal due to be reviewed on 18 May is certainly coming under pressure. China will no longer require the volumes previously coming out of the Ukraine, having recently purchased multiple large shipments from the US. The deal is also reliant on the west unlocking certain sanctions imposed on foreign assets and accounts held by Russian agricultural businesses. The future of the grain corridor therefore looks questionable.

In summary, hold onto your hats we are in for a bumpy and volatile ride! The slight comfort is that if the Russians continue to operate a “minimum price”, a base has been set, the question is where do we go from here. Be alert and seize the opportunities as they present themselves, be aware that buying tendencies are moving quickly, don’t hang on to old crop, pay close attention to global weather and Black Sea politics.

Good luck!

SFI – Farm Equipment and Technology Fund Round 2

Round 2 of the Farming Equipment and Technology fund (FETF) has now opened for 2023 this time it has been split into two themes:

Productivity and Slurry (this is now closed)

Animal Health and Welfare (Closes 15 June 2023)

Funding is available towards specific items of equipment to boost environmental sustainability, reduce input waste and improve productivity on farm. The minimum grant is £1,000 and maximum grant is for £25,000. If you were successful in round 1 of the FETF you can still apply for up to £25,000. There is a large list of equipment which can be funded, including:

• Livestock Handling Systems

• Livestock Weighing Systems

• Automated sheep footbath

• Weigh bars or platforms

• EID equipment

Our agribusiness consulting and farm management team offer a high level of technical and practical experience. Please get in touch if you would like to discuss any grant schemes including the Farming Equipment and Technology Fund in more detail.

| BPS & CSS applications are now open

2023 BPS window is now open until 15 May.

Countryside Stewardship Mid-Tier applications for agreements starting 1 January 2024 are now open until 18 August 2023.

Countryside Stewardship Higher-Tier applications for agreements starting on 1 January 2024 are now open until 28 April 2023 Please get in touch with a member of your local Fisher German Agri-business team for any help with applications.

| Forestry Commission - Woodland Grants

There are several grants and other incentives available for woodland creation, maintenance, management and tree health. These include:

• Woodland creation and planning grant

• England woodland creation offer

• HS2 Woodland fund

Urban tree challenge fund

• Woodland carbon code

• Woodland carbon guarantee

Part of Countryside Stewardship:

• Woodland management plan

• Woodland tree health

• Woodland improvement

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Month (ex farm) Midlands Feed Wheat Feed Barley Oilseed Rape Currency April 2023 £190/t £170/t £365/t £/€ = 1.13 Milk Data Avg Monthly Price UK Farmgate Milk Price 40.2 ppl Fuel/Straw/Silage Price Fertiliser Price Red Diesel 76.1p/l Nitram £/tonne £435.00 Big sq Baled Wheat Straw £45.00/tonne Gran Urea £/tonne £420.00 Big Bale Hay £80.00/tonne TSP & MOP £tonne £545.00 Finished Steers Finished Lambs Finished Pigs p/kg dwt 497.9 583.1 215.5 | Grain Market Prices

Six additional standards announced for the SFI

The Sustainable Farming Incentive pays farmers to carry out farming activities in a more environmentally sustainable way so that food can be produced alongside environmental goods and services. DEFRA has announced that they will be introducing 6 new standards this year, that are going to be available from the summer, these are:

• nutrient management standard

integrated pest management standard

• hedgerows standard

• arable and horticultural land standard

• improved grassland standard

• low/no input grassland standard

Defra has set out actions under each of the new standards, each action has its own aim. The integrated pest management standard for example has four actions:

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Integrated pest management Complete and integrated pest management (IPM) assessment and produce an IPM plan

You must not burn heather, rough grass, bracken, gorse or vaccinium in upland areas from this date (GAEC 6) £989/annum

Integrated pest management No use of insecticide

Integrated pest management Establish a companion crop

Integrated pest management Establish and maintain flower-rich margins, blocks or in field strips

Key Dates

16 April 2023

Cross Compliance

30 April 2023 Cross Compliance

You must have recorded the number of ‘specified’ livestock kept on your farm during the previous calendar year and calculated the amount of nitrogen they produced. You must also record the number and type of livestock in a building or hardstanding during the previous storage period (SMR1)

£45/acre

You must not carry out hedge or tree coppicing or hedge laying from this date (GAEC7a and 7c) £55/acre

Establish flower rich grass margins so there are flowering plants during summer months into early autumn. £673/acre

You must not burn heather, rough grass, bracken, gorse or vaccinium in upland areas from this date (GAEC 6)

You must have recorded the number of ‘specified’ livestock kept on your farm during the previous calendar year and calculated the amount of nitrogen they produced. You must also record the number and type of livestock in a building or hardstanding during the previous storage period (SMR1)

1 May 2023

Cross Compliance

You must not carry out hedge or tree coppicing or hedge laying from this date (GAEC7a and 7c) schem

fishergerman.co.uk

01858 410200

farms@fishergerman.co.uk

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