AgriFacts December 2018 Your monthly roundup of news, prices and other farming matters
Market Commentary At time of writing UK markets seems to be in a void. The uncertainty around Brexit has left many trying to avoid any news be that market orientated or at national level. The old crop markets seem to be mainly focused on logistics and execution with buyers currently keeping a low profile. The question remains as to how long they stay quiet. Judging the amount of forward cover that consumers have against remaining stock that farmers and the trade have, is a very difficult game. This is not made any easier buy the potential issues surrounding this year’s UK crop sizes and the demand side uncertainties. Animal feed data certainly would imply an increased demand for cereals but for how long and of which type? The season started with barley being the commodity of choice for many feed manufactures, but it quickly priced itself out of the ration and was replaced, where possible by imported wheat and imports / domestic wheat. The uncertainty over feed demand is then matched by forage availability and more interesting livestock slaughter data. Many cattle and livestock farmers will have had to make some very hard decisions in the last month or so, with feed prices currently at levels not seen since 2013/14. The real question is at what point does other demand for cereals turn off? Both UK ethanol plants are apparently now closed for intake but ever since the announcement that they would close for an indefinite time, various dynamics have changed – namely the price of ethanol v oil and the price of global sugar. If you then add the uncertainty of the Pound and the thought of the UK importing ethanol to meet its blend targets, along with the uncertainty of Brexit it becomes very clear that much can still change in this market and farmers need to stay awake.
wheat and barley crops just being harvested, but it’s not just tonnes that focus the attention but also quality profiles. With most global consumers looking for better than feed wheat attention to quality is important, especially with global maize values remaining so cheap. CBOT corn has been trading at around 44$/mt discount to wheat for many months now but with various political trade wars going on buyers are having to choose where they get their maize from. US corn exports account for close to 39% of global trade with Argentina, Ukraine and Brazil all shipping similar amounts – 15/17%. Long and short the 4 countries supply 88% of the global trade and with the EU anticipated to be the number one importer this season following the logistics in the Ukraine will remain important just as will watching the arrival of the Brazilian and Argentinean crops. US corn could also put in a re-entry into the EU but only if the EU and Mr Trump sort out their differences. This year certainly isn’t an easy trading year, but UK farmers have the added bonus of a weak currency and a smaller than average crop, which may when adjusted later in the season turn out to be smaller than currently declared. The concerns for new season are numerous but if talk about a bigger UK wheat area is confirmed the market will at some point have to work out how to value new crop wheat. Until then we have a winter to get through and a water table in many areas that remains very low, it may feel like the time of year to forget about marketing grain, but I feel you may do so at your peril. Cecilia Pryce Compliance, Shipping and Research Openfield
Globally there is also much that can change. The global cereal supply and demand numbers are still up for refinement with the southern hemisphere
Month (ex farm) Midlands
Feed Wheat
Feed Barley
Oilseed Rape
Currency
Jan 2019
£163-168/t
£160-165/t
£318-322/t
£/€ = 1.12
May 2019
£168-173/t
£165-170/t
£323-328/t
€/£ = 0.89
Nov 2019
£150-155/t
£135-143/t
£318-323/t
$/£ = 0.78
Milk Data
Avg Monthly Price
UK Farmgate Milk Price
31.52 ppl
Fuel/Straw/Silage
Price
Fertiliser
Price
Red Diesel
67.05p/litre
34% N AN (bags UK) £/tonne
£291.50 (Feb19)
Big sq Baled Wheat Straw
£55.00/tonne
0:24:24 blend (bags) £/tonne
£286.00
Big Bale Hay
£100.00/tonne
20:10:10 blend (bags) £tonne
£280.00
p/kg dwt
Finished Steers
Finished Lambs
Finished Pigs
354.5
390.3
143.6
Arable Update Oilseed Rape Loss
2019 Crop Areas
United Oilseeds have reported up to 10% of Oilseed Rape planted this year has been destroyed due to drought or flea beetle attacks.
AHDB’s ‘Early Bird’ Survey is due to be released shortly. This is the first indication of the UK’s crop areas for harvest 2019.
The worst affected area are farmers in central and eastern England, with the co-operative stating that 20% of the crop in Bedfordshire has been lost.
Spring Crop Seed An implication of the substantial areas of failed winter oilseed rape alongside a short supply of bean seed (both winter and spring) due to germination worries, is that there is pressure on supply of spring cereal seed. Growers who have not already secured their supply of spring oat, barley or wheat seed are encouraged to do so.
Agronomy Growers and agronomists are reporting the mild autumn has led to large numbers of aphids in both cereal and oilseed rape crops risking virus infection. As with all insecticide applications observe pest thresholds and environmental protection zones before considering application. Soil temperature and moisture levels have been at levels where propyzamide applications have been made to oilseed rape crops in many cases with growers making the most of favourable travelling conditions for the time of the year.
Subsidies - Basic Payment Scheme 2018 Calculator Payment for the 2018 BPS are due to commence from 1 December in England and Wales. As we previously forecast, the rates are very similar to last year. If you would like to check that your 2018 payment value is correct, please use the calculator on our website using the link below. https://bit.ly/2QrTBjC
Key Dates Date
Regulation
Restriction
1 December
Cross Compliance
You need to carry out your annual inventory of sheep and goats
1 December
Countryside Stewardship
Begin to spread supplementary feed mixture, for the Supplementary Winter Feeding for Farmland Birds (AB12), at an average rate of 25kg on the ground at least once a week from 1 December
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