News From the Farming Market May 2018

The Government has requested exemption from the EU three crop rule for the UK for 2018. The rule dictates that three different crops be grown each year to meet diversification requirements. Failure to do so adversely affects subsidy payments. The poor weather in the UK has made compliance difficult, hence the request.

Scottish farmers are beginning to receive £300m in balancing payments topping up partial payments under the Basic Payment Scheme made in November 2017. The partial payments were made in anticipation of problems with the payments system. In England, £117m has been paid as bridging finance to 3,200 farmers still waiting for finalisation of their 2017 claims. The deadline for 2018 claims is 15th May.

The consultation period on the future of the agricultural industry and financial support regime, post Brexit, ends on the 8th May. The industry is pressing for clarity and a long transition. A new Agriculture Bill outlining government plans will be published later this year.

Investment in milk processing capacity, in the UK, totalled £432m in the last four years, the highest level amongst the six largest milk-producing nations in the EU. Meanwhile the dairy processor, First Milk has announced its intention to sell its two Scottish creameries at Arran and Campbelltown. The announcement follows a strategic review of the business and will enable increased investment in its other processing plants.

Pig farmers and agricultural experts are calling for the ban on feeding leftover food (swill), to pigs, to be ended. The ban was enforced in 2001, across the EU following a foot-and-mouth outbreak traced to untreated swill. Proper treatment renders the swill safe and ending the ban would reduce food waste and pig rearing costs and benefit the environment.

The dairy co-operative Arla is to hold its milk price to farmers for May at 27.43p per litre following a cut in the April price. Arla cites a stabilising of the milk market with some prices strengthening due to tight supplies caused by the poor weather. Arla is the largest of the UK dairy co-operatives.

A stronger pound and an end-of-season shortage have combined to raise wheat prices and draw in imports of both feed and milling wheats. Wheat and maize is being imported for ethanol production; the ready availability of imports will limit likely price rises.