Defra has confirmed that farmers will continue to receive the current level of subsidy support until 2022, an additional two years beyond what was promised after the Brexit vote. However, farmers are being urged to use the time to review their business models and land management to reflect subsidies that are likely to focus more on the environment.
After several years of discussion and negotiation, agreement has been reached to widen the scope of access to the Canadian market for UK beef. Currently Canada imports 147,000 tonnes of beef of which the UK accounts for less than 1%. Exports will also start, soon, to the Philippines and resume to China for the first time since the BSE ban in 1996.
Plans for a new sugar beet processing factory to be built near Harrogate look to have fallen through. The scheme for a £350m plant was first proposed last year to process beet from 3,500 farmers, no such facility currently exists in Northern England. However, disagreements between the developers and North Yorks County Council have brought plans to a standstill.
The newly formed Food and Drink Sector Council has met for the first time to pursue its aims of boosting agricultural productivity and increasing industry skills. The Council includes stakeholders from all sectors of the £20bn UK food and drink industry.
The international dairy co-operative, Arla, has announced an investment of £72m in the UK this year, despite the continuing volatility in milk prices. The UK is the company’s biggest single market and the investment will see ten of its twelve sites upgraded.
The Government has said that superfast broadband is now available to 95% of premises in the UK but also admits that significant areas are still without a fast connection. Farming leaders point out that these are mainly rural areas and businesses are being held back by the deficiency. A recent global analysis of broadband speeds shows the UK in only 31st place.
More than 93% of farmers, in England, have now received their Basic Payment Scheme money. The Rural Payments Agency cites issues with EU rules as the barrier to clearing the remainder. Farmers who haven’t received their money by the end of March will be offered a bridging payment of 75%.
Dairy farmers have again raised the prospect of labour shortages, post Brexit. In some areas, non-UK workers account for over 20% of staff numbers many in skilled positions and employers fear they may not remain here.
The repercussions from the recent decision to re-license the weed killer, glyphosate, continue. The EU parliament is to set up a special committee to review authorisation procedures generally and the glyphosate case in particular. The committee will also consider if the relevant EU agencies are adequately funded and staffed.
The market report for 2017 from the Soil Association shows a sixth year of steady growth of the organic farming sector. The market grew 6% to a new high of £2.2bn and now accounts for 1.5% of the total UK food and drink market. The acreage of farmland being converted to organic is rising after a long-term decline. Arla and other milk processors are looking to increase their production of organic milk as they forecast an expanding market.
The latest survey of the rural land market shows that prices averaged £10,260 an acre during the second half of 2017. This is slightly higher than the first half of the year but 2% down on the same period in 2016. Since the Brexit vote both supply and demand have been subdued and this is expected to continue throughout 2018 with prices stabilising.
EU wheat exports have fallen by over 16% to their lowest level for five seasons. The main factors are the current strength of the euro and strong competition from Black Sea countries. Russia has undercut its EU competitors by 8% on recent international deals. The availability of more stocks in Europe is likely to limit price rises in the UK.
UK dairy sales increased by 4.5% to £10.7bn in 2017. Milk sales rose by 4% to £3.28bn and cheese by 3.5% to £2.8bn. Exports of cheese grew by 3%. However, rising input costs and increased production from Germany, France, Ireland and Poland is likely to put the sector under pressure over the next twelve months.
A bumper sugar beet harvest with record average yields has caused problems. The crop is processed at the four British Sugar factories but a slow start to the campaign and issues with equipment has led to a backlog and complaints from growers that the crop is being left too long on farms and is likely to deteriorate.
UK exports of beef, lamb, pork and offal products exceeded £1.2bn in 2017. Beef sales rose 11% to £409m with strong growth in Asian markets.
Reproduced with kind permission from NIG FarmWeb