Category: Arable

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 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.

Like many real-life farms across the country, Andersons’ Loam Farm is also having to deal with the effects of the very wet autumn.  This has led to budgets for harvest 2020 being reworked to accommodate more spring planting.  Of the usual 300 hectares of wheat that this farm plants each autumn it has been assumed that half will not get in.  The farm is planning to grow 150 Ha of spring barley instead.  The resulting figures are shown in the table below – figures for the past two harvest are shown along with the pre-rain budget for 2020 and then the current one.

* result   ‚~ estimated   #ƒ budget

It can be seen that profitability was forecast to decline for the coming harvest anyway.  This was partly as a result of yields reverting to the mean after the wheat and beans produced higher-than-average figures for the previous harvest.  But costs were also projected to rise for the present cropping year.

With the farm now planning to grow a substantial area of spring barley, it can be seen that the overall output drops from the original budget as the revenue from the crop will not be as large as from winter wheat (despite some malting premium being assumed).  Output has also been reduced by the forecast oilseed rape yield being decreased – some of Loam Farm’s OSR crops are looking sickly in the wet ground.  Variable costs decrease as spring barley is a cheaper crop to grow.  No change has been made to overheads as it is assumed that cost structures will not change in the short-term.

Overall, the wet autumn means that profitability looks set to be reduced compared with initial estimates.  However, the change is not massive, which highlights the fact that spring crops don’t always affect overall performance too much if they are done well, simply because of how expensive it is becoming to grow winter crops.

Loam Farm is a notional business, located in East Anglia, which has been running since 1991 and tracks the fortunes of arable farming.  It comprises a 600 hectare (1,480 acre) combinable crop farm running a usual rotation of milling wheat, WOSR, feed wheat, and spring beans.  Of the cropped area, 240 Ha are owned and 360 Ha rented on FBTs.  There is a working proprietor plus one full-time man and harvest casual.

The wet October has frustrated potato lifting, with some growers still expecting to be harvesting at the end of November when crops will be vulnerable to more rain or frosts.

Early season conditions in the east of the country were, if anything, a little dry, while crops in the west and north of the country have had too much rain throughout the season.  The poor weather will lead to pressure on potato supply for the second year running and prices are starting to increase sharply already and are expected to rise throughout the season.

The AHDB estimates that 2019 GB plantings are just shy of 119,000 hectares, up only marginally on the 2018 figure.  Yields are likely to be below the long-term average and it is unlikely that a national crop of more than 5.2 million tonnes will be delivered.  The wet harvest will mean that good quality material will be in particular demand.

The European crop suffered from drought and heat in the first part of the season which damaged yields and made early harvesting difficult.  Heavy rain in the last six weeks has now delayed lifting and a significant shortage is likely.  This is supporting prices and demand for imported potatoes.

The UK has benefitted from EU import demand over the last year, particularly from Poland.  Exporters feared that a No-Deal Brexit would bring trade to a halt because, after departure, the UK would be treated as a third country supplier without EU export certification.  It was unknown as to how long it would take for the UK to gain certification.  However, sales of around 20,000 tonnes to the Canary Islands would have been protected by a separate arrangement as would seed potato exports to Egypt and Morocco, which have agreed to recognise the UK’s export status even outside the EU.

The UK has had a record-breaking cereals harvest in 2019.  According to provisional Defra estimates, the total crop was over 25 million tonnes – the highest in the last two decades, and possibly of all time.  It is thought to be 22% higher than the 2018 figure.  In contrast, the oilseed harvest is down 13% on the year and at its lowest level since 2004.

The figures come from the June 2019 Survey of Agriculture and Horticulture, showing planted areas in the UK for main crops, and also estimates for crop production.  The key results for the arable sector are summarised in the table below.  The data is provisional, with final results expected before the year end. Wales does not produce provisional results, so 2018 data has been carried forward to allow UK figures to be presented.

2019 data is provisional

The figures indicate that wheat production in the UK is 20% larger than in 2018.  This is a combination of a larger planted area (+4%) and much better average yields than last year (+16%).   Barley output has increased by even more, with production almost 26% higher year-on-year.  The area recovered after its slight fall in 2018, and yields were high.  A closer look at the split between winter and spring tells us that the winter crop area has dramatically increased from the low point seen last year to its highest planted area since 2003.

The oat area has continued its upward trend the last five years, with a good yielding harvest up nearly a fifth on last year at 6.0 tonnes to the hectare, resulting in the overall production of oats being up by more than a quarter at 27.2%.

The rise in the various cereal areas has been largely because of the decline in OSR plantings – as can be seen from the table, other break crops such as linseed, pulses or roots have hardly changed at all.  The UK oilseed rape area has fallen to its lowest level since 2002 and down 9.2% on 2018’s crop area.  With yields in 2019 nothing spectacular, overall output has dropped by 13% year-on-year.  Total UK OSR production is over a third lower than its recent high-point in 2011.  The lack of pest and disease control continues to cause problems in oilseed rape production, with anecdotal evidence that flea beetle has continued to be an issue this planting season, becoming more prevalent across the UK. 

As we have outlined in previous articles, the large amount of grain availability is weighing on cereals’ markets and has contributed to the slide in prices seen over the last few months.  Conversely, the relative scarcity of oilseed rape has helped support values.   This is probably not sufficient compensation though to generate a turn round in OSR plantings for next season, with another likely decline expected. 

As growers in England start to lift potatoes into store, the AHDB has updated the 2019 planted GB potato area.  The revised figure puts the area at 118,950 hectares, 1% higher than last year, although this still remains one of the lowest on record.  According to the AHDB the majority of the increase has been seen from smaller growers increasing their area and is likely to be due to last year’s higher prices.  A fuller analysis of the potato market will be included in next month’s Bulletin.

The British Society of Plant Breeders (BSPB) has published it royalty rates for Farm-Saved Seed for 2019/20.  This covers autumn 2019 and spring 2020 plantings. The rates can be found at http://www.bspb.co.uk/farmsavedseed/combinable-crops-payment-rates-and-eligible-varieties.php