AgriFacts September 2019 Your monthly roundup of news, prices and other farming matters
Market Commentary: Weak sterling helps UK exports With the rain clouds finally clearing, the UK is rapidly progressing towards the end of harvest 2019 and it has become clear that this year’s crops are on course to be at the top end of historic UK production. Farmers have been reporting record breaking yields in both winter and spring barley. Wheat yields are also coming in above average with the total wheat crop set to exceed the 16 million mt marker for the first time since 2015. But is all this reflected in today’s prices? In a word, yes. Prices have been sliding lower as the abundance of grain floods into the market and London wheat futures are back to lows not seen for over two years. The UK will have its staple domestic demand, but there will also be a significant exportable surplus of both wheat and barley to place in excess of domestic requirements. Today the UK is competitive in the world export arena and ports have been busy loading vessels throughout August, but for how much longer will this be the case? Weak sterling is currently helping the UK to connect on export business and most shipments are destined for the EU. Both currency and the opportunity to ship to the EU tariff free are hanging in the balance as the 31st of October rapidly approaches and with it the UK’s due date to part company with the European Union. Our new Prime Minister Boris Johnson has made it abundantly clear that he is prepared to depart without a deal on that date and, In the midst of a political standoff with the European
parliament, our currency has touched on 10 year lows against the Euro. The sentiment in the UK grain trade is understandably nervous. However, if we do leave Europe on 31st then we will have gained something lost over the past two and half years; clarity. Once we understand the parameters of our exit then we will gain the ability to react. The supply chain and port prices may be given a bit of a reshuffle but the fundamentals of grain markets are based on supply and demand. If we lose Europe as an outlet then we must look to North Africa and the Middle East. If Europe loses the UK as a supplier then they will likely purchase more from Black Sea origins. Although this article focuses on UK markets, there is no shortage of grains in the global balance sheet either, confirming that high supply is an overriding factor for the year. However, there is a big price gamble in the form of Brexit to overcome in the first quarter of the campaign, adding another layer of complexity to farm marketing strategies. As we wait to see how this will play out, the UK is reaping the benefits of what it has sown in the form of the inevitable price pressure brought to bear by a large harvest, but it is important to remember that good yields will compensate very well for lower prices in the bottom line. Zoe Andrew Key Account Manager Grain
Market Prices Month (ex farm) Midlands
Feed Wheat
Feed Barley
Oilseed Rape
Currency
September 2019
£118.00/t
£109.00/t
£330.00/t
£/€ = 1.10
October 2019
£121.00/t
£110.00/t
£332.00/t
€/£ = 0.91
November 2019
£122.00/t
£110.00/t
£333.00/t
$/£ = 0.82
Milk Data
Avg Monthly Price
UK Farmgate Milk Price
28.09ppl
Fuel/Straw/Silage
Price
Fertiliser
Price
Red Diesel
51.93p/litre
34% N AN (bags UK) £/tonne
£258.00
Big sq Baled Wheat Straw
£47.00/tonne
0:24:24 blend (bags) £/tonne
£292.00
Big Bale Hay
£94.00/tonne
20:10:10 blend (bags) £tonne
£262.00
p/kg dwt
Finished Steers
Finished Lambs
Finished Pigs
326.5
394.4
150.36
Rural Payments Agency Updates Farming Is Changing The RPA released their leaflet https://assets.publishing.service.gov.uk/ government/uploads/system/uploads/attachment_data/file/826341/ future-farming-leaflet-august-2019.pdf setting out how direct payments are likely to phase out, the planned delinking of direct payments and their planned consultation on taking a lump sum payment in place of future direct payments. Countryside Stewardship agreements are intended to continue post Brexit until the new Environmental Land Management (ELM) Scheme is in place. While the Brexit debate continues now is the time to think about how these proposals will affect your business and our Agribusiness team are more than happy to have an informal chat with you over the implications.
Cross Compliance - EFA With harvest almost complete and changes being made to cropping plans remember to check that your plans are compliant with the EFA rules and in particular the 3 crop rule proportions. With the need to get crops re-drilled for example after OSR failures it is easy to forget this rule but much easier to ensure you are compliant now rather than in early May.
Cross Compliance: Water Abstraction Licences New regulations came into effect on the 1st January 2018 which ended the practice of taking water from the environment for certain uses and from certain sources without an abstraction licence. Farmers abstracting more than 20cu m on any one day must apply to the Environment Agency for an abstraction licence. The Environment Agency have confirmed that they need enough time to accept and validate the applications before the final 31st December 2019 deadline due to the process taking up three months. The Environment Agency and Defra have strongly advised those now needing a licence to submit their application by 30th September 2019. If farmers to not apply before the deadline they risk losing their right to abstract water.
Key Dates Date
Regulation
Restriction
1 September
RPA
You can cut or trim hedges and trees from this date.
1 September
Cross compliance
For those within an NVZ: 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.
15 September
Cross compliance
For those within an NVZ: Start of closed period for applying manufactured nitrogen fertilisers to grassland
16 September
Cross compliance
For those within an NVZ: 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.
20 August 14 October
RPA
EFA Catch crops must be established 20 August and be retained until at least 14 October.
1 October
RPA
Cover crops must be established by 1 October and be retained until at least 15 January.
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.