Category: Arable

As of late February, the price difference between new crop feed wheat and new crop feed barley is £23 per tonne. Clearly, the market has gathered that there will not be much wheat harvested.  It looks like it is also assuming a large area of barley will be harvested compared with usual.  Clearly, the chances of this are beginning to erode as well.

If we work on 1.3 million hectares of wheat plated in the end, (we really don’t know), an area not seen since the mid 1970’s, and use a low yield of say 7 tonnes (because surely what has been drilled is not in good condition), we get to 9 million tonnes, about 56% of last year’s 16.2 million tonne wheat harvest.

So how will we provide for the millers and many other consumers of wheat? Some have talked of a generous carry from old crop into new. This is a possibility, for wheat, because there is a full price carry, i.e. the price of a spot sale is does not fall as new crop becomes available as is ‘normal’.  November 2020 wheat is about £12 per tonne dearer than the spot position.  This may be tempting for some to think of storing wheat beyond next harvest.  But for many, the incentive will not be enough, and many will not be able to hold off that long either even for cashflow reasons, though many farms will have considerably lower costs this year.

We can always import wheat, some will already have been procured no doubt, but the physical facilities to import grains are not as good as for exports, simply as we don’t normally have to do it.  And by January, we might have tariffs to contend with.  Other consumers, particularly the feed mills will be able, at least in part to switch to benefit from that large discount for barley.  We may notice that price gap close a bit when this starts.

It is too early to make such crop production projections for barley as more time is still available for drilling subject to a change in the weather. Oats too, might be up on previous years and pulses, if the rain stops could be very high too. But all these high area possibilities depend on one thing stopping, and currently there seems little immediate prospect of this.

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.

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.

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.

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

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. 

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.

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.