AgriFacts May 2020 Your monthly roundup of news, prices and other farming matters
Market Prices Month (ex farm) Midlands
Feed Wheat
Feed Barley
Oilseed Rape
Currency
May 2020
£150.69/t
£125.69/t
£303.85/t
£/€ = 1.14
June 2020
£151.85/t
£126.31/t
£304.85/t
€/£ = 0.88
July 2020
£153.31/t
£125.85/t
£303.69/t
$/£ = 0.80
Milk Data
Avg Monthly Price
UK Farmgate Milk Price
28.63ppl
Fuel/Straw/Silage
Price
Fertiliser
Price
Red Diesel
56.82p/litre
34% N AN (bags UK) £/tonne
£234.00
Big Sq baled wheat straw
£45.00/t
0:24:24 blend (bags) £/tonne
£253.00
Big bale hay
£54.00/t
20:10:10 blend (bags) £/tonne
£233.00
p/kg dwt
Finished Steers
Finished Lambs
Finished Pigs
323.17
424.78.10
161.10
Market Update Coronavirus has made for an extraordinary few weeks across the country. The pre-lockdown panic quickly developed into a stay at home routine, and many will now be wondering when things get back to normal. On farms, our focus has probably been getting on with the farming, with planting, lambing, calving and turnout high up the priority list for many. We’re in an industry where there is a strong underlying demand for what we produce and tracking weekly food and drink sales over recent weeks underlines that. The 4 weeks to 22 March 2020 saw record-breaking grocery sales. An extra £1.4 billion was spent on food and drink in those four weeks compared to the same period last year, an uplift of almost 22% (Kantar). Overall, retail volumes and values of food and drink have remained strong throughout April. However, the retail market is only one part of the equation. The majority of foodservice outlets effectively closed for business as lockdown restrictions were implemented in March. There are consequences for food and farming. In dairy, processors with a disproportionate reliance on foodservice were impacted as demand collapsed. Factor in limited alternative processing capacity and rising milk production from the spring flush, and we’ve seen milk tipped away. An estimated 5% of dairy farmers have had issues with milk not being collected as a result, but the impact of price reductions and production decreases will see thousands of dairy farmers impacted.
Closure of foodservice outlets has also had an impact on beef, with a proportion of hindquarter cuts typically ending up on plates in pubs, hotels and restaurants. There’s also been a surge in demand for mince at the retail level. The latest data shows sales are up 29% year on year, with mince accounting for 64% of beef sales by volume. With demand rocketing for mince and stalling for higher value cuts, the industry faces a carcase balance challenge. Retail sales of lamb have seen limited benefit from lockdown. Shoppers have opted for price and convenience, with lamb struggling to tick the box on those two factors. Livestock prices have, however, held up relatively well considering the extent of disruption. Average deadweight cattle prices for the last full week in April stood at 323p/kg, down 12p/kg from the end Feb price. Sheep prices took a hit in the two weeks following lockdown, but gains through April means that deadweight and auction prices are on a par with where they were at this time last year. Price drops are never welcome news, but prices haven’t slumped over the last six weeks and taken us into unprecedented territory either. In contrast to dairy and livestock, cereals prices are currently higher than those we saw in early March and remain above the five year average. That might be small consolation to growers that have faced planting challenges over the last six months and it’s fair to say that UK cropping patterns in 2020 will be far from optimum. In addition, cereals prices have seen a lot of volatility in recent weeks as factors like currency, global plantings and weather prospects impact commodity markets. Looking ahead, many of us will be hoping we get back to normal as quickly as possible, but we also need to be realistic. We should plan for that short-term volatility that we’ve seen in recent weeks to continue. A potential recession will impact demand, foodservice businesses won’t re-open at the same rate that they closed their doors, and short-term oversupply for some commodities will weigh heavily on domestic and global prices. That means reviewing business plans and budgets based on different scenarios. Over the longer term I’d hope that coronavirus triggers a rethink over sourcing decisions, risk and resilience in our food supply chains. But for now, planning for uncertainty is the priority. Phil Bicknell AHDB
Countryside Stewardship Scheme - apply now The application window is now open for a Mid-Tier Countryside Stewardship scheme and closes on the 31st July 2020, although an application pack must have been requested by 30th June 2020. Mid-tier schemes are generally for a five-year term and part or all the farm may be included. If you would like to discuss a potential scheme, please contact a member of the Agribusiness team.
Post-Brexit Trade Talks between UK & US Sparks Farm Assurance Concerns The start of post-Brexit trade talks between the UK and US has prompted renewed warnings that British farm standards must not be undermined. Talks between UK international trade secretary Liz Truss and US trade representative Robert Lighthizer are due to begin on Tuesday (5 May) via video conference because of the coronavirus pandemic.
The government has pledged that any agreement will not compromise the UK’s high environmental protection, animal welfare and food standards. However, farm leaders want a clear statement that any food imports will not be produced using methods that would be illegal in the UK. This would mean a ban on imports of chlorine-washed chicken and hormone-treated beef – both practices are allowed in the US, but banned in Britain.
The Country Land and Business Association (CLA) said a potential trade deal offered both opportunities and threats to UK growers and livestock producers. The US is a huge market and a free-trade agreement would give American consumers the ability to enjoy world-class British food produced to very high standards. According to the UK government, eliminating tariffs and reducing other trade barriers with the US could boost the economy by between 0.07% and 0.16% over the next 15 years, depending on the terms of the agreement.
Key Dates Date
Regulation
Restriction
1st May
Cross Compliance
15th May
RPA
BPS 2020 entitlement transfer deadline, and deadline to have land at the customer’s disposal.
31st May
RPA
Deadline to request RPA/CSFO approval for certain stewardship options i.e. GS6.
15th June
RPA
BPS application deadline and CSS /Entry Level Stewardship (ELS) & Higher-Level Stewardship (HLS) revenue claims deadline.
30th June
RPA
Mid-Tier Countryside Stewardship Scheme (CSS) application pack deadline.
30th June
RPA
Deadline for making certain changes to a submitted BPS application, or CSS/ELS/HLS revenue claim already submitted by midnight on 15 June.
31st July
RPA
Deadline for submitting application for a 2021 Mid Tier Countryside Stewardship/ Wildlife offers agreement.
No hedge or tree coppicing and hedge laying should take place.
fishergerman.co.uk 01858 410200 farms@fishergerman.co.uk
Fisher German is a limited liability partnership, registered in England and Wales. Registered number: OC317554 Registered office: The Head Office, Ivanhoe Office Park, Ivanhoe Park Way, Ashby de la Zouch, Leicestershire LE65 2AB Regulated by RICS Fisher German LLP has tried to ensure accuracy and cannot accept liability for any errors, fact or opinion. Please do not use this as all the advice needed to make decisions.