Agrifacts September 2023

Agrifacts | September

2023

of news, prices and other farming matters

Your monthly roundup

This month’s grain market update is provided by ODA.

| Can Wheat Prices rebound?

World wheat prices came back to their season lows this week and then rebounded on key support levels. We consider that the bearish wheat market trend is not justified by its own fundamentals. It is negatively influenced by large feed supplies and thus far, sluggish demand. But the milling market is tight. Prices could well rebound later in the season and quality premiums should remain much above average levels.

There are three reasons for agricultural commodities to be going down over the last 15 months:

• First, is the combination of large feed supplies (corn, wheat, and barley) and sluggish demand (feed sector crisis).

• Second, the very aggressive prices and large supplies from Brazil and Russia which have led to very slow export demand for US corn and soya along with EU milling wheat.

• Third, Black Sea geopolitics have had, so far, very little positive influence on world markets, despite ongoing and growing risks. Record Russian exports combined with creative logistic solutions in Ukraine are currently amongst the main elements of pressure on international prices.

If we do not deny the heavy feed fundamentals, we still consider that these three bearish factors could change fast and take prices higher.

Indeed, the USDA well supplied and bearish S&Ds are based on two major assumptions: South America will produce a record crop in 2023/24 and Black Sea exports will reach world markets without disruption.

South American planting is just about to start, and conditions remain very dry, despite El Nino. Weather market will price any adverse condition. We will use our large South American network to be timely informed!

The Black Sea is clearly becoming a war zone, and, at this stage, it is only escalating. Danube ports are bombed every week and Ukraine will do whatever is possible to destroy the Kerch Bridge. In these circumstances it is very probable that both Russian and Ukrainian exports will be significantly disrupted, at some stage, in the coming months. We do not know the date, but we know it is probably imminent.

During the first two months of the season, Russian and Brazilian expor ts have been strong enough to apply downward pressure on world prices. However, they are losing competitiveness now and export demand will soon be back for EU and US origins.

For the first time in 5 years, world wheat production is down YOY. Wheat ending stocks are at their lowest levels in 7 years. Quality wheat supplies are low with Northern Europe, Ukraine, and Canada reporting quality and yield issues. EU wheat is now more competitive and should attract more demand going forward. Ukraine exports are slower than needed. A perfect cocktail for a wheat price rebound. The trigger could come either from Black Sea logistics disruption, adverse South American weather or from Indian import needs…

Markets are bearish, but the market story could change anytime!

Sébastien MALLET, ODA UK

SFI 2023 Applications open 18 September

From 1 September, farmers have been invited to express their interest in entering a SFI scheme. The application window will then open from 18 September.

There will be 23 actions that farmers can receive funding for, many similar to options that had been available through Countryside Stewardship Mid Tier schemes.

Here are some of the popular options farmers are looking at:

IPM4: No use of insecticides £45/ha

SAM2: Multi-Species winter cover £129/ha

NUM3: Legume fallow

Do not use plant protection products containing insecticide to support an IPM approach by managing crops pests in a more sustainable way.

There is a well-established multi-species cover crop over the winter months to protect the soil surface and provide root structure benefits the soil.

Legume fallow that produces flowering plants from late spring and during the summer months to manage nutrient efficiency and improve soil health.

You must not apply any plant protection products that contain insecticides

Mix must include at least 2 species. IT can be grazed but still needs to be well established over winter months.

Establish mix containing at least 6 flowering species including legumes. This cannot be grazed but can be topped to prevent blackgrass from setting seed.

Please get in touch with a member of the team to discuss any options and what may be the best approach for you.

| Calf Housing for Health and Welfare grant

You can apply for a Calf Housing for Health and Welfare grant to build new, upgrade, or replace existing calf housing buildings to deliver health and welfare benefits for your calves.

For the purposes of this grant, the term ‘calf’ refers to domestic cattle up to 6 months old.

A successful project will:

• improve calf health and welfare

• enhance environmental sustainability

• introduce innovation

Countryside stewardship Capital Grants applications are still open

If you are looking at getting any fencing, hedgerow planting, coppicing or any other capital work that is funded under the capital grant scheme, applications are still being taken. Please get in touch if you require any more information or help to apply.

Landscape Recovery - Round Two

Applications for the second round of the landscape recovery are open until midday 21st September. This round will help support projects that support net zero, protected sites and wildlife rich habitats.

Key Dates - Cross Compliance

Date

1 September 2023

1 September 2023

Restriction

You can cut or trim hedges and trees from this date. (GAEC 7a and 7c)

Start of closed period for applying organic manure with a high readily available nitrogen content (for example, slurry, poultry manures or liquid digested sewage sludge) to grassland on shallow or sandy soils. (SMR 1)

1 September 2023 Start of closed period for applying manufactured nitrogen fertilisers to tillage land. (SMR 1)

15 September 2023

16 September 2023

1 October 2023

1 October 2023

15 October 2023

31 October 2023

1 November 2023

30 November 2023

Start of closed period for applying manufactured nitrogen fertilisers to grassland. (SMR 1)

Start of closed period for applying organic manure with a high readily available nitrogen content (for example, slurry, poultry manures or liquid digested sewage sludge) to tillage land on shallow or sandy soils which have been sown with crops on or before 15 September. (SMR 1)

You can burn heather, rough grass, bracken, gorse or vaccinium on land in upland areas from this date. (GAEC 6)

Start of closed period for applying organic manure with a high readily available nitrogen content (for example, slurry, poultry manures or liquid digested sewage sludge) to tillage land on soils which are not shallow or sandy. (SMR 1)

Start of closed period for applying organic manure with a high readily available nitrogen content (for example, slurry, poultry manures or liquid digested sewage sludge) to grassland on soils which are not shallow or sandy. (SMR 1)

If you hold a summer water abstraction licence (authorising abstraction wholly within the months of April to October), the Environment Agency will make actual abstraction return forms available to you from 31 October. You then have 28 days to send your readings to the Environment Agency. (GAEC 2)

You can burn heather, rough grass, bracken, gorse or vaccinium on land, other than in upland areas, from this date. (GAEC 6)

If you have a two-part tariff agreement for your water abstraction licence, expect to receive your second part charge after 30 November. (GAEC 2)

1 December 2023 You need to carry out your annual inventory of sheep and goats. (SMR 8) schem

| The Green Offset

If you missed our latest update on The Green Offset you can read it here