Farming Update – December 2018

A new initiative is being pursued that farms can play an increasing part in the generation and storage of renewable electricity. This would lead to the increased use of electric vehicles in agriculture, horticulture and forestry which will be important in the light of any future bans and restrictions on diesel and petrol vehicles.

Early indications of plantings for 2019 harvest show that wheat and barley areas are set to rise by 4% and 13% respectively. Oats continues its upward trend with a rise of 9% making an increase of 50% since 2015. The oilseed rape area is forecast to fall by 3%, drilling conditions have been good for all crops so far.

Uncertainty in agriculture driven by Brexit, the new Agriculture Bill and other factors has prompted the Agriculture and Horticulture Development Board (AHDB) to produce an in-depth analysis of each sector together with an insight as to what lies ahead for markets.

Changes to animal welfare regulations, post-Brexit, have been agreed that pass power to the devolved authorities. These are likely to impact on the rules covering the transport of live animals including the contentious question of their export. Both the Scottish and Welsh authorities have come out against a ban on live exports.

European milk volumes are holding up well and with global stocks increasing, prices have begun to come under pressure. Against this background the processors Arla and Muller have announced slightly reduced prices for producers.

An export market to India, for sheep meat, has been established for the first time. Detailed inspections and negotiations have been completed for exports worth around £6m over the first five years. Overall sheep meat exports are currently worth £386m.

More than 65% of claimants received their Basic Payment Scheme money on the first day of the payment window (3rd December). Over 55,000 claims were settled worth £853m. The Rural Payments Agency expects over 90% of claims to be paid by the end of December.

The forecast of the 2018 cereal crop, across Europe has been lowered to 281m tonnes compared to a harvest of 300m tonnes in 2017. Despite this fall, prices are predicted to be stable or slightly lower in 2019.

The 2018 potato harvest was the worst for some years at 4.9m tonnes, 13% down on the five-year average. The low harvest is a result of a 4% drop in acreage planted and a 12% drop in the average yield. Weather conditions had a major impact on yield with cold weather causing plantings to be late and hot, dry conditions in June and July limiting tuber growth.

There was a similar weather-affected picture in the cereals harvest, according to a recent survey covering 50,000 hectares in England. Wheat yields were down between 3% and 8%. Oilseed rape was down 8% with bean yields down by around 30%. The exception was winter barley which was established before the adverse conditions and yielded 5% more.

A wide-ranging review of farm regulation commissioned by Michael Gove has concluded that the current EU based regime is too inflexible and is based on often unfair penalties instead of positive help and guidance. A major recommendation is to have one farming regulator to replace five Defra bodies and local authorities. Farming leaders have welcomed the report.

Ofcom has announced a series of new measures to compel mobile network operators to improve coverage in rural areas. The roll-out of 4G to the countryside has been slow and patchy with 41% of homes and businesses being adequately served compared to 84% in urban areas. Part of the new deal with operators will include the provision of an additional 500 new masts.

The Government is expected to launch a consultation on the introduction of mandatory contracts between milk suppliers and processors. Many producers feel that the current dairy supply chain is not fairly balanced and favours processors too heavily, a view shared by the Government. The plans would replace the present voluntary code.

Agricultural Insurers have reported an increase in the cost of farm fire claims in 2018 of 21% to £31.5m with £13m worth of damage occurring in July alone. The weather was a major factor, according to the Met Office, the summer was the warmest since 2006 and the driest since 2003.

The number of registered milk producers in England and Wales, continues to decline with 83 leaving the sector in October and November. Numbers have halved to 9,023 since August 2002. It is not clear if the spike in numbers in October and November indicates a future trend or is the result of two difficult years for producers.

Reproduced with kind permission from NIG FarmWeb