Category: Arable

Wheat Area Down in UK

The area planted to wheat in the UK is expected to fall by 1.3% according to the results of the annual AHDB Early Bird Survey of UK planting intentions.  The survey, conducted by The Andersons Centre with the support of the AICC and other agronomists, captures a snapshot in early November.  This is a crucial caveat to the survey, in that it reflects the time before storms Babet, Ciarán and Debi.

Irrespective of the conditions of the storm, winter plantings were already expected to decline owing to the wet conditions which have persisted since harvest.  The area planted to winter barley is expected to fall by 6%.  Much of the fall in winter cropping will be replaced by spring barley (forecast up 13%) or oats (up 12%).

With prices having tumbled from their post-Ukraine invasion high, it is no surprise to also see the area intended to be planted to OSR falling by 16%.  This will also include a proportion which has already been written off, with flea beetle and slugs enjoying the mild post-planting weather.

Time will tell as to whether all the wheat area intended is planted.  Weather conditions between now and mid-January will be pivotal.  In addition, close attention needs to be paid to the condition of crops in the ground (see accompanying article).

A further update, with regional detail will be produced in mid-December, once Defra publish a full UK crop area figure.

Crop Conditions Update

It has been a challenging start to the 2024 season for many, to say the least.  Persistent rain during and post-harvest has been followed by storms Babet, Ciarán and Debi, leading to some crop casualties already.  For many, this year has marked the most significant challenge to the drilling campaign since 2019, although rainfall has largely been less persistent.

Andersons has compiled a crop condition assessment for the AHDB, summarised below in the order of planting.

Winter Oilseed Rape

Generally, the winter OSR crop can be split into three groups according to when it was planted.  The earliest established crop is generally in good condition, having rooted into good moisture and developed well to stave-off pest pressure and subsequent rains.  If anything, some of these crops are too far forward.

Crops established around the August Bank Holiday went into drier seedbeds, owing to the one week of very hot weather this year.  These crops are in far worse condition, with cabbage stem flea beetle migrating at a similar time.  Slugs have also been a significant issue, with mild evenings and wet weather.  Many regions have already written off considerable areas.

The final group is the late-August/early September crop.  This has generally established well, although root development was hampered by colder conditions and the crop isn’t as far forward as it should be.  It remains to be seen how these crops get through the winter given some of thier poor rooting.

Generally, more OSR will be written off this season than normal.  In addition, CSFB pressures are being seen further North and West than in a typical season.

Winter Barley

The winter barley crop was generally looking good, up until recent rainfall, having been established in reasonable conditions.  That said, with some crops sitting in water-logged soils, yellowing has been seen.  Crops should recover, although if biomass development is hindered,yield prospects may be too.

Given the moisture this autumn, good, stale seedbeds and weed control were achievable for many. Hopefully this will result in lower grass weed pressure than last year.

Winter Wheat

Wheat is undoubtedly the crop of biggest concern.  Whilst the AHDB Early Bird Survey estimates a planted area of 1.698 million hectares, much of this will have been either undrilled or not very well established by the time the rains hit in October and November.  Typically, by the end of October we would expect much of the winter wheat crop to be planted.  Regional estimates of planting vary from 70% to 85% on average.

Concern over the potential for crop failure is reported across many regions by businesses of all sizes. Some of the worse hit wheat is in the Midlands and the North East, where there is expected to be a degree of write-off.  What this crop is replaced with remains to be seen and will depend on how much of a field is written off.  Where headlands and wetter patches are affected, there may be an effort to re-establish wheat.  Failing that, a rise in fallow, or generally thinner, patchy, low-yielding crops are to be expected.

Pest pressure for wheat has also been considerable, with reports of the worst slug damage some have seen for 10 or more years.

Glyphosate

The EU has re-approved the authorisation of Glyphosate for a further 10 years.  In a vote to approve an extension of the licence for use, Member States failed to reach a qualified majority.  It therefore fell to the EU Commission to make the final decision.  With no scientific evidence to prove negative effects from the weedkiller, its licence was extended until 2033.  The previous extension in the licence was only for 5 years.  However, some additional restrictions were placed on its use.  The most important was a ban on its use as a pre-harvest desiccant.  But individual countries could still licence it for this use if it is felt necessary for good agronomic practice.  Of course, the UK now has its own pesticides regualtion regime and is not directly influenced by what happens in the EU.  However, with Europe concluding that glyphosate is safe to use and, presumably, the issue not being re-opened for 10 years, it makes it more likely that the chemical will continue to be available to UK farmers.

Grain Markets

Global Grains

Global grain markets are largely unchanged on the month.  There has been some short-term support, but there is a distinct lack of news to sustain any price increases.  Both the USDA and the International Grains Council (IGC) published their latest world grain and oilseed supply and demand estimate updates.  For grains, both organisations made downward revisions to global ending stocks, the USDA by 2Mt and the IGC by 6Mt.  In both cases the downward revisions come from reductions to maize stocks.  That said, the month-on-month reductions to the outlook are a drop in the ocean relative to the forecast 60 million tonnes of stocks.

With the US maize harvest 59% complete, the next important drivers for grain and oilseed markets are likely to come from the southern hemisphere.  The picture in Brazil is split, where excess rainfall in the south is delaying soyabean plantings, whilst more rainfall is needed in the north of the country.  If this continues it has the potential to support soyabean and so rapeseed prices.  Beyond this, attention will turn to South American maize planting.

UK Market Update

It’s been a challenging drilling window for many so far this year.  Whilst the autumn has been mild, the stop-start rains which prolonged harvest have continued.  Reports suggest that pest pressures are increased, particularly for oilseed rape with both flea-beetle and slugs a problem.  The relatively mild weather has seen widespread flea-beetle damage in rape crops further north than usual.  In addition, storm Babet left many fields, particularly in the Midlands, East Anglia and Scotland under water.

As with the global market, UK wheat prices are relatively unchanged month-on-month.  There are odd opportunities to benefit from short-term spikes.

The AHDB published its ‘Early’ Balance Sheet for the UK wheat and barley market.  For wheat, whilst the carry out stocks from last season are up significantly (9% year-on-year), AHDB estimates the 2023 wheat crop to be significantly smaller (14.1Mt).  This is due to a much smaller planted area than had been expected.  Consumption of wheat is also seen increasing, with both ethanol plants expected to remain operational.  There is also expected to be a switch from barley to wheat for some animal feed compounders.  With a smaller pig herd and poultry flock and reports of reasonable forage production for ruminants, there will be questions over the level of animal feed demand this season.

The UK wheat market is left in a broadly similar position as it was in the 2021/22 season. However, the lack of support in global markets and little domestic activity is keeping prices subdued.  Defra will provide another update on the size of the UK wheat crop in December.

For barley, large opening stocks and decline in animal feed demand are expected to outweigh the drop in production year-on-year.  As a result the UK is expected to have 1.5 million tonnes of barley which will either be held as stock or exported.  Small volumes are moving, but there are currently cheaper origins than the UK for barley.

Whilst feed markets may be under pressure, there continues to be strong premiums for milling wheat and malting barley.  Milling wheat premiums are in the region of £65 per tonne and malting barley premiums have reached as much as £85 per tonne.  The importance of knowing and maintaining the quality in the barn cannot be overstated this season.

Pulse prices have remained firm against other combinable crops, although there are suggestions that feed beans and peas may be displaced by cheaper protein sources into animal feed.  The trade expectation is that prices will fall.

Beet Price

British Sugar and the NFU have still not agreed a contract beet price for the 2024 crop.  They are now taking the matter to independent arbitration.  The Centre for Effective Dispute Resolution will assist the two parties to come to an agreement.

Spray & Seed Imports Extended

The Government has put in place measures to ensure imports of seeds and sprays from the EU can continue.  As we wrote in April (see https://abcbooks.co.uk/spray-import-ban/) the ‘parallel’ import of equivalent plant protection products (PPP) for the EU was banned as from the end of June.  Imports of seed treated with products approved for use in the EU (but not registered in the UK) were also due to cease at the end of this year.  This was going to be a particular problem for maize seed and some horticultural crops.  It has now been announced that Secondary legislation will be enacted to allow further temporary access to these products.  For treated seed, any product approved in the EU will be allowed to be imported to the UK until 1st July 2027.  This is to give manufacturers time to get products approved in the UK.  However, part of the issue is that the UK market is ‘too small’ for it to be worthwhile to go through the process.  It remains to be seen how this issue will be addressed in the long-term.  For PPP, there will be an extension of existing parallel spray permits until 31st December 2024.

Potato Markets

The resilience of the potato crop has shone through this season, with yields higher than might have been expected given one of the latest planting periods for many years.

Cold and wet conditions delayed spring drilling, with some growers not finishing until early June.  But since then, conditions have been favourable with a mix of sunshine and summer rain – there was twice as much rainfall as normal in July.  The crop was also able to withstand heatwaves in June and September, so overall yields are at least average for many and above average for some.

Better-than-hoped-for yields will not compensate for a decline in the area however.  It may have been down by as much as 10%, with a bigger drop in the packing potato area.  Overall GB plantings are likely to be 100,000 hectares or smaller – a record low.  The crop may struggle to get above 450,000 tonnes.

The small size of the crop is already apparent in higher prices, with values of between £250 and £450 per tonne for packing types, depending on variety and quality, according to the Potato Call newsletter.  Most bagged potatoes for the fish and chip trade are being sold for at least £250 per tonne.  Prices could increase further once harvest supplies ease and growers lock potatoes up in store.

The discovery of isolated cases of Colorado Beetle in Kent and Hampshire potato fields over the summer led the Canary Islands to suspend imports of all UK ware and seed potatoes.  That trade should be resuming soon after more checks and restrictions on what and how potatoes could be moved to the Islands were agreed between Defra, the Spanish and Canarian authorities.  The trade in ware and seed to the islands is worth more than £10 million a year.

A small increase in area and improvement in yield means there are more potatoes in Europe this year than last, but volumes are still below 2021 and 2020 levels.  Prices started the season at record highs of up to €500 per tonne for processing potatoes, but have plunged to €100 per tonne as harvest supplies have increased.  The expectation is values will rise later in the season.  In many cases, contract prices are 30% higher than last year, beginning at €175 per tonne and rising to €280 by June.

Demand for potato products around the world remains strong despite some recent buyer resistance to high prices.  This includes record imports of frozen chips into the UK, which rose by almost 60% in the year to July to £919 million.

Expansion of the potato crop in 2024 could be held back by a lack of seed.  The area is estimated to have declined by 7% in key seed potato areas including the Netherlands and Scotland; European association Europatat has urged buyers to accept larger seed sizes to ensure they have the seed they need.

 

 

Sugar Contract 2024

British Sugar has announced that the minimum beet price for 2024 will be £37.50 per tonne.  However, this is not an agreed figure with the NFU under the IPA, as negotiations have failed to produce a price so far.  British Sugar (BS) is likely to be keen to get a price out into the sector ahead of autumn plantings.

The price compares with £40 per tonne for last season.  BS argues that production costs have fallen as has the price of alternative crops such as cereals or oilseed rape.  The NFU has pointed to the current strength of the sugar market and the fact that many costs are still elevated.

BS has stated that it will offer a ‘market-linked bonus’ for the 2024 crop.  This would take the price of beet above £40 per tonne if the sugar market remains at current levels.  The yield protection option and contracting part of production under a futures-linked price will also be continued from the 2023 contract.

BS and the NFU are continuing to negotiate.

Oats Herbicides

Oats growers may find their armoury to control grassweeds diminshed this season.  Previously, an Extension of Authorisation for Minor Use (EAMU) was available on the crop for diflufenican.  This includes both the straight product (such as Hurricane) and mixes – (e.g. diflufenican + flufenacet, such as Liberator).  However, the threshold for what counts as a ‘minor’ crop is set at 50,000 hectares.  The UK oat area is far in excess of this.  The HSE is now removing EAMUs for ‘major’ crops.  The sector is looking at options including getting an on-label approval for oats, but this may take some time.

Parallel Spray Imports

The Government has pledged to address the loss of parallel spray imports.  As we wrote back in April (see https://abcbooks.co.uk/spray-import-ban/) the HSE has banned the import of equivalent Plant Protection Products (PPP) as from the end of June, as the EU is no longer supplying data to assess whether they are the same products as approved in the UK.  Farming Minister Mark Spencer and Defra secretary Therese Coffey have now written to the NFU stating that they are ‘committed to addressing’ the issue.  There is also an associated problem with seed imported into the UK from the EU, which has been treated.  This especially affects maize and some root crops.  It seems there may be a temporary extension of the approaval for these imports put in place this autumn.  Defra will then look at options for a more long-term solution.