Crop Areas

The AHDB’s Early Bird Survey of cropping and planting intentions for harvest 2020 was repeated in Mid-February. It shows a significant drop in winter cereals area, even more than in November (when it was first undertaken).  For example, the winter wheat area is forecast to fall by 27%.

The table below shows a summary of the Early Bird results.  Changes in cropping area have been extrapolated onto the data from Defra’s provisional 2019 UK June Survey to produce forecasted crop areas for the 2020 harvest.  Already, they are now looking rather optimistic.

As it included the planting intentions as well as what was already drilled, it captured farmers’ then still eager plans to plant in late February and Early March.  If, at that point, the weather had been anything near ‘normal’ for the time of year, then drills would be coming out early next week.  But that was all ahead of the onset of Storm Dennis and before the full impact of Ciara was appreciated which jointly kyboshed that.

 

Early Bird Survey (EBS): GB Crop Areas for Harvest 2020 – source AHDB
‘000 hectares DEFRA June Survey 2019 EBS Forecast Harvest 2020 % Y on Y change
Winter Wheat 1,790 1,304 -27%
Spring Wheat 26 200 +672%
All Wheat 1,816 1,504 -17%
Winter Barley 453 347 -24%
Spring Barley 710 1,042 +47%
Oats 182 229 +26%
Other Cereals * 51 54 +5%
Oilseed Rape 530 361 -32%
Other Oilseeds‚ ** 17 25 +47%
Pulses 178 226 +27%
Arable Fallow 224 336 +50%
Other Crops on Arable Landƒ *** 719 756 +5%
TOTAL 4,880 4,880
* includes rye, corn and triticale, ** includes linseed & borage, *** includes s. beet, potatoes, vegetables, Maize (33%) and temp grass (20%)

Much of those plans are now not likely to happen. Every day that rain continues to fall (and more is coming), is now gradually tightening the drilling window for spring cropping throughout so much of the UK.

Your Editor has spent much of this week (24th Feb onwards) travelling by train.  If the views from the window are anything to go by, pretty much the entire country north of the M4 and south of Edinburgh are in a similar condition; flooded or saturated with sitting water on untended fields.  Bales of straw still sit un-gathered in puddles of mud.  For those fields that are drilled and the crop has emerged, it is becoming increasingly evident that most fields have large bare patches – up to 40% in some cases.

The water appears to have nowhere to go and the rivers are a rich brown, telling of the topsoil that has been washed away.  We expect the soil structure of many fields, even those that have not had root crops, will be in a poor state and take a season or more to correct.  In parts of central England, the only drilling since October has been on land that had cover crops on them.  Perhaps this will be a lesson to the industry to consider these crops more seriously.

The Early-Bird Survey is undertaken each autumn to assess national cropping intentions.  It is carried out by The Andersons Centre with the help of the Association of Independent Crop Consultants (AICC) and other agronomists.  Over 80 agronomists took part in this year’s survey contributing over 615,000ha of arable land stratified across all regions of Great Britain.

Three Crop Rule

At the time of writing the NFU is still campaigning for an exemption to the Crop Diversification rules (‘three crop rule’) under BPS Greening.  Defra has not announced any derogation as yet.  Last month we reported that RPA had released guidance for claimants (see https://abcbooks.co.uk/wet-weather-three-crop-rule/).  It is perhaps worth reiterating that fallow land is classed as a ‘crop’ and that spring and winter varieties are also treated as separate crops based on the variety grown and not the date when sown.  In addition where a crop has been planted but subsequently fails it can be counted as the original crop (field records will need to be kept if evidence is required on inspection).  Lastly, for those who will struggle to get anything or very little drilled, there are also exemptions to the Crop Diversification rules; where more than 75% of the arable area is left fallow (or is used for temporary grass or planted with leguminous crops) the three crop rule does not apply.

Nutrient Management Guide

The AHDB has released its latest version of the Nutrient Management Guide; RB209.  The guide is applicable to all those farming in England, Wales and Northern Ireland and offers best practice guidance on the application of fertilisers and organic materials to crops and grassland.  The main changes to the revision include new recommendations for the use of Phosphate in arable crops, which is the outcome of 10 years of research work.  The latest RB209 focuses on taking accurate soil samples but also grain sampling and analysis, the latter has been identified as helping to give a more accurate picture.  A further change to the RB209 P recommendations sees an arable farm only growing autumn-sown combinable crops being able to manage their arable soils at index 1, instead of the previous benchmark 2.  This should be possible on well-drained soils, where plants can development good root systems and fresh P can be applied annually.  Further information and the latest version can be found at: https://ahdb.org.uk/RB209

Glyphosate

The US Environment Protection Agency (EPA) has (again) confirmed Glyphosate is safe to use.  In an interim decision, the EPA concluded there were ‘no risks of concern to human health when Glyphosate is used according to the label and that it is not a carcinogen’.  The findings are consistent with the US Department of Agriculture and the European Food Safety Authority.  However, this contrasts with the World Health Organization’s International Agency for Research on Cancer (IARC), which concluded in 2015 that Glyphosate is ‘probably carcinogenic to humans’.  The EPA’s evaluation is part of a routine re-registration process that the agency conducts every 15 years for pesticides in the US market place.

Glyphosate is the active ingredient in Monsanta’s Roundup, now produced by Bayer.  The company is currently facing nearly 43,000 compensation claims, alleging Roundup is responsible for causing cancer; the majority of these claims are in the US.  Glyphosate is approved for use in the EU until 15th December 2022.  Of course now we have left the EU, the UK government can set its own rules on plant protection products (PPPs), although during the Transition Period, to the end of this year, the EU rules still apply. 

Planting Update

This is a short article this month.  A few bits and pieces of drilling have apparently been able to take place, on the slightly lighter and faster draining land, but really very little; probably not enough to match the amount of autumn drilled barley, oilseed rape and even wheat that, this month, has been officially written off by the farmer and his agronomist.

Some commentators in regions less affected by the heavy rain and the saturated soils are confused by the noise, expecting the flooded fields to be confined to small corners of fields, floodplains or pony paddocks.  There are consequently still people projecting wheat crops comfortably over 13 million tonnes and others sticking to sub-10 million.  Currently, our wheat area projection sits at about 1.6 million hectares, of which about 1.1 is probably planted.  This would be at about the level of the 2013 crop and before that not seen since 1981.  With a lower than usual yield, this may give a 11.5 to 12 million tonne crop.

Some seed merchants have reported fast sales of all spring crops (possibly with the exception of oats), and for some crops, pulses in particular, sales have been stellar.  Indeed, it is possible that some farms have overbought, with a view to either cancel their spring seed order or keep their winter seed through until next autumn.  It has been a good year for seed merchants but next year might not be.

Potatoes: Output and Prices

Final 2019 harvest estimates show the UK crop was the third smallest crop this century, although the British crop was just above the psychologically important five million tonne level.

Latest figures from the AHDB show a 3.7% increase in production in Great Britain (England, Scotland and Wales) to 5.100 million tonnes.  Output in Northern Ireland was up 11.5% to 129,400 tonnes taking the UK figure to 5.229 million tonnes; 3.9% more than in 2018.

The UK area was up 1.0% to 122,753 hectares, with only a 0.9% increase in the British area to 118,953 hectares.  Average British yields were up 9.4% to 46.5 tonnes per hectare, with a 5.5% increase in Northern Ireland yields to 35t per Ha.  British seed production was up 1.1% to 560,200 tonnes, with a 4.0% increase in ware area to 4.540 million tonnes.

Although the increase in UK production is only just over 200,000 tonnes, total output might be enough to supply the British market, especially if there is reduced export demand.  British exporters were able to ship the highest volume since the 2010/11 season from the small 2018 crop but prices for the 2018/19 season failed to take off as much as many had expected.  Export prospects for the 2019/20 season will depend on the quality of potatoes in store.

The mild and largely dry early January conditions allowed some remaining crops to be lifted but material is very vulnerable and there are reports of poor fry quality among late-harvested crops.  Recent warm weather will also not have helped stocks in ambient stores.

Current free-buy prices are about £200 per tonne.  That is £60 per tonne less than they were a year ago but more than double where they were two years ago.

The effective banning of use of the storage chemical CIPC from the 2020/21 year and concerns over seed supplies may limit any gain in potato area this year, which is unlikely to be more than 124,000 hectares for the whole of the UK.

Combinable Crop Markets

This time last year, we showed the chart below with the faded bars.  It demonstrated wheat was priced with a typical carry as it goes through the year; with the monthly rise in value the longer you keep it to account for the costs of storage. It also showed the usual drops in value each year when the new crop physically comes into the marketplace.

The dark blue bars show this year’s equivalent set of futures prices, and how there is a full carry from now all the way through to May 2021.  In other words there is no drop in price when the flush of new crop becomes available this summer.  It demonstrates that the market understands that there might not be much harvest to account for the flush.  Only when we get to the summer of next year, do we see wheat futures prices start to fall.

UK Wheat Futures Price – source AHDB

Old crop wheat is currently cheaper than new crop, but is still dearer than equivalent continental values meaning they are too expensive to secure exports to EU destinations.  It also suggests that, if the supply situation changes in coming weeks, the market might fall considerably.  This may be prompted if there are enough dry conditions for the many farmers still sitting on their winter wheat seed, some varieties of which could still be planted well into February, to get some more drillings done.  Globally, wheat prices are strong, sitting at levels not seen at all in 2019.  Some with a crop already safely growing, will see this as an opportunity to sell some new crop forward now.

Higher wheat prices have boosted feed barley values this month too.  This has been coupled with some useful exports, particularly from old crop.  New crop barley could be a big one this year, with large volumes of spring barley seed committed or delivered.  The markets (both wheat and barley) will be sensitive to both the ongoing weather throughout the spring and also the updates on drilling.  We do not expect a million hectares of spring barley to be drilled, but it largely depends on how the weather turns out in coming weeks.  Wherever possible, many growers are still very focussed on getting their wheat in the ground.  It is difficult selling even the feed base forward this year as currently, many farmers are not even sure what they will harvest.

It is emerging that large crops of soybean from the southern Hemisphere, Brazil in particular, are expected this coming year, and other regions such as Ukraine are looking to grow more oilseed rape. This, coupled with trade talks between the Chinese and Americans, has seen oilseed rape lose some value.

Old crop pulses have been rising in price this month, partly because of demand for the protein, but also, it is thought, as growers hold tonnages back for potentially drilling.  Winter beans can be drilled relatively late, and of course, spring beans might also play an important role in the 2020 rotation.  Many seed merchants have sold out of bean seed and potentially, we could have the largest pulse cropped area the UK has recorded for many years.  It takes a long time to multiply beans up (compared with cereals and especially oilseed rape), hence the high proportion of home saved seed.

Arable Markets

Overall Comment

Whilst in some counties over the last week the weather has been harsh, over the country it appears overall, December has so far been considerably ‘less wet’ than the previous 3 months. But with soils already saturated it does not take much to keep the land impassable. Now the crops are mostly dormant meaning nothing is transpiring the water away, and minimal evaporation is taking place either as temperatures are too low with high humidity. In other words, a millimetre of rain here and there has been topping up the already sodden soils. Cold dry frosts have also been scarce this autumn, meaning that grain conditioning in store has been difficult. Some samples, particularly of barley have been losing premiums because of infestations. Managing grain quality will become increasingly difficult this winter.

Wheat

Nevertheless, the AHDB has reported they consider the winter wheat planted area has now risen to about 60 of intended plantings, suggesting progress of about 5% since the last of these bulletins was published. Clearly, at this rate, and if weather conditions do not change, there will still be about 30% of the planned winter wheat area undrilled at the end of February; about the end of the window available for drilling most of the varieties currently sat in bags in farm barns around the country.

UK grain traders have had a challenging time this season, unable to book grain exports past the official Brexit dates. For a year with a large crop to sell, this has affected market prices. Perhaps some clarity in the New Year will facilitate the rest of the marketing campaign.

Barley

Old crop markets are asleep already in preparation for the Christmas break. Its not even planted yet, but the prices for the 2020 crop have not been great, with expectations of very large UK and EU crops. Few buyers are buying much new crop yet, as prices are so bearish. Certainty regarding the EU departure will support the buying confidence.  Seed traders have been gathering what spring barley tonnages they can and, between them, it appears there is enough available for in excess of a million hectares to go in the ground, as soon as conditions allow. This would be the highest spring barley crop since 1988, and the largest total barley crop since 1990; that is, assuming it is dry enough to drill by then.

Oilseed Rape

Global demand for vegetable oils is strong. The Chinese still demand vast tonnages of soybeans, despite millions of its pigs, who et the meal) have been slaughtered because of African Swine Fever. This might shift the balance of demand between oil and meal which would favour crops like oilseed rape that have a higher oil content. Certainly, oilseed rape has done quite well over the last month, regardless of the overall movements of sterling.

Pulses

Pulses trade quickly in the first half of a marketing year, then slow down for the second half. The export market for pulses for this season is quickly reaching that point, partly as the Australian crop will be competing strongly come January, and also because of customs clearance deadlines in North Africa.

 

 

Global Grain Markets

Harvest 2019 produced mixed results on a global scale, in terms of the main combinable crops.  As the months progress, the figures produced by the likes of the International Grains Council (IGC) become more accurate as better data becomes available (and harvests are completed around the word).

For wheat, after the ‘blip’ in production seen for harvest 2018 (due to European droughts and other factors), there has been a recovery in production.  This is weighing on prices to some extent, but an increase in consumption means that forecast year-end stocks will be in the range seen over the last few years.

The figures for 2019 maize production have been revised up over the last month.  Even so, global output for the year is down on 2018.  Year-end stocks are seen falling from 318 million tonnes to 279 million tonnes, or about 3 month’s global supply.  The stocks-to-use ratio is at its lowest level for some years.  As maize (‘corn’ in the US) is the benchmark cereal from which most others are priced, tighter markets should give some support to all grain prices.

Soybean production and year-end stocks are forecast to fall for harvest 2019.  With consumption rising this can only be bullish for oilseeds commodity prices, including our oilseed rape crop.

Weather and 2020 Cropping

Weather Data

The extraordinarily wet autumn has left as much as half of the planned winter wheat area still undrilled at a time of year when we would normally expect over 90% to be completed.  Throughout much of the East Midlands, from the heavy soils of Leicestershire to unusually wet Lincolnshire flats, fields as far as the eye can see remain uncultivated.  The data from the Met Office does not fully reflect the problems that have been caused.  Looking at October rainfall alone in most parts of the UK, the amounts only to a 1 in 13 chance (i.e. this amount of rain has fallen ten times over the last 130 years).  It is when you add up the rain from early summer through to now, that it becomes a one in 35-year occurrence.  Indeed now, with soils saturated, only a millimetre or two of rain re-saturates the fields again.  Many farmers in this region have now gone away from their farms, and plan to return to tackle spring cropping.

UK October Rainfall Statistics from Met Office

Oilseed rape too has suffered from rot, and Cabbage Stem Flea Beetle, which has been worse this year than, it seems, any other.  The resolve by many farmers and agronomists not to cultivate OSR in future has been publicly made.  Whether we see that promise carried through next year or not we will see, but some will certainly be looking for alternative cropping options.

Europe is also struggling to plant its winter crops, albeit not as much as here in Britain.  Strategie Grains has reduced its estimate of EU planted areas for 2020 harvest to less than last year and crop ratings in France have been slipping.  Only three quarters of French wheat is drilled so far, compared with 97% in normal years at the end of November.

Early-Bird Crop Area Forecasts

The wet autumn has had clear effects on this autumn’s arable plantings.  The AHDB’s Early Bird Survey of cropping intentions for harvest 2020 has just been released and shows a significant drop in winter cereals area.  The table below shows a summary of the results.  Changes in cropping area have been extrapolated onto the data from Defra’s provisional 2019 UK June Survey to produce forecasted crop areas for the 2020 harvest.

The wheat area is forecast to fall by 9% which, if correct, would result in 1,645,000ha for harvest 2020, this would be the lowest wheat area since 2013. The spring wheat proportion within total wheat is seen rising a considerable 358%. It is thought that potentially half the UK winter wheat crop is still not planted though, so the decline could end up larger than the survey currently suggests.

The winter barley area is expected to fall by 12% to about 398,000ha (still higher than 2018), and oilseed rape experiencing a 23% reduction to about 406,000ha. This would be the smallest area drilled since 2002.

The area of spring crops are expected to increase in 2020 and could further rise depending on the next couple of months. Spring barley is anticipated to rise by 28% to 915,000ha, a level not seen since 1988, when over a million hectares was cropped. The survey suggests that the pulse area may rise by nearly a quarter to 221,000ha, almost to levels seen in 2016. This is likely led by spring pulses but it is also noted that winter beans can generally be planted quite late in the season. Unsurprisingly, the fallow area is also thought to be rising (17%).

Other arable crops are all seen rising for 2020. This includes other combinable cereals (up 16%), other oilseeds (up 16%) and other non-combinable crops on arable land (including roots, vegetables, and a proportion of maize and temporary grass crops) (up 5%).

The Early-Bird Survey is undertaken each autumn to assess national cropping intentions.  It is carried out by The Andersons Centre with the help of the Association of Independent Crop Consultants (AICC) and other agronomists.  Over 80 agronomists took part in this year’s survey contributing over 615,000ha of arable land stratified across all regions of Great Britain.