Farming Update – November 2018

JCB has announced record machinery sales for 2017. Strong demand from overseas markets led an increase in turnover of 28% to £3.4bn. Demand has continued in 2018, pushing production levels to a record 500 machines per day. A new £50m plant in Staffordshire, is due to open in 2019.

An outbreak of BSE on a farm in Scotland is being investigated. It is the first incident for over ten years. The disease was found during routine tests on the carcass, but the origin of the disease has not yet been identified.

Latest industry figures show an increase in the amount of farmland coming onto the market in the third quarter of 2018. The 96,600 acres offered for sale is 23% up on 2017 and 10% up on 2016. Values have generally risen little over the last two years and demand is patchy with around one-third of land marketed in 2017 unsold.

The Trade Secretary has reassured farmers that farming standards will be maintained after Brexit. He has dismissed rumours that trade deals are being won on the basis of reduced livestock welfare standards and says that the attraction of the UK is actually because of our high standards. Meanwhile MPs have expressed serious concern over Defra’s lack of preparations for a no-deal Brexit following questioning of the Minister, Michael Gove.

The Government has rejected an application for emergency authorisation to use two neonicotinoid products to treat sugar beet seed for next year. The products come under a general ban and it is felt that there are no “exceptional circumstances” to warrant lifting the ban and the risk to bees remains too great. An investment of £60,000 has been announced, by Defra, to investigate and improve bee habitats.

Ensus has announced that its bioethanol plant on Teesside will pause production from the end of November. The company cites difficult market conditions with prices for their product having fallen “significantly” in the last few weeks, contrary to their predictions. The nearby plant operated by Vivergo stopped production at the end of September.

Total sales of antibiotics for use in food-producing animals have fallen to their lowest level since 1993. In 2013 concern over resistance to antibiotics prompted a Government strategy to reduce their use in farming leading to a 40% fall in the period to date.

Now that the financial elements that make up the Basic Payments Scheme have been agreed, payments should start to reach claimants from 3rd December. Rates for moorland are slightly less than last year with lowland and upland rates slightly higher (less than 1%). Reductions begin to apply to payments over £150,000. The Treasury has been asked to make bridging funds available for those farmers whose payments are held up beyond December.

The Soil Association, the guardian of organic standards in the UK, has announced a major review of standards to strengthen them and make them more straightforward for producers. Key changes are to poultry, antibiotics and a lessening of the waiting period after the use of veterinary medicines.

In the period 2015 – 2017, the EU took 380,000 tonnes of milk powder off the market and into intervention to help support producers. So far this year, 180,000 tonnes have been released back onto the market in phases, following improvements in prices.

The drive to increase agricultural exports to the far east continues with a mission to Taiwan to explore the market for UK pork meat. Taiwan has granted access to its markets for UK pork for the first time.

Defra has completed around 75% of the 86 statutory instruments needed for Brexit but has been criticised by the Public Accounts Committee for its lack of progress in many other areas. There is little understanding of the likely impact on the import and export of animals, foodstuffs and chemicals with too little information passed down to traders.

Over 90% of farmers have measures in place to drive environmental improvements on their farms with 62% planning further investment in 2019, according to the latest research. The priorities have been soil management, waste reduction and preservation of the countryside. Most believe that this is the right direction to move in with less than 10% citing subsidies as a driving force.

MPs have called for the Agriculture Bill to promote the development of farming co-operatives as a means of creating a more resilient agriculture sector. Currently there are 420 co-operatives with 143,000 members and a turnover of £7.7bn. However, these represent only 6% of the market and numbers have declined for the last four years. Co-operatives represent 45% and 55% of the market in Germany and France respectively.

Reproduced with kind permission from NIG FarmWeb