Putterings

Sitting here on July 19th deciding what to write for the August issue there is no doubt that the weather is a major factor for discussion. Having been through one of the worst spring dry spells in the past century, suddenly in mid-July we get torrential rain in some areas – but generally too late to have much effect on most cereal crops. Over the weekend of July 11th and 12th rainfall in Suffolk and Essex varied from 15–50mm. Since then and between the showers, the combines have been active in some winter barleys and samples are beginning to be provided. It is too early to say too much about quality but it looks as though it will be reasonable with yields possibly about average for winter varieties although this will be variable relative to drought conditions and soil types. It really is too early to call.

Most of the current media coverage is speculating on Government financial cuts to get us out of the depths of despair. The Institute of Fiscal Studies has recently estimated that Defra’s £3 billion budget could be cut by up to one third in the autumn comprehensive spending review. This will no doubt feature cuts right across its responsibility spectrum – from agriculture to Natural England. With its other department – the Environment Agency (EA) – estimating that £20 billion is needed for flood defence work over the next 20 years. Chief executive Paul Leinster has said that the future of defence work will be dependant on new sources of funding from the private sector. This will include increased contributions from those that will directly benefit from the defences. It’s possible that this could result in a council tax levy such as the one that has been introduced in Gloucester. It is no surprise however that the EA has recently published an information pack for landowners called ‘Supporting Change,’ aimed at involving landowners in flood and coastal risk management. This is a guidance document for landowners farming land on the coast and on major rivers explaining how to get support and advice from the EA to carry out their own defence work – a significant turn-around in policy from a year or two ago. The future responsibility for maintaining sea and river walls looks like reverting to those who own the land!

Grain Gossip

Well, what a turn around! Wheat prices have moved up significantly in the past two weeks due to a range of bearish production factors across Europe and North America. From the mid-June spot price low of about £92 ex-farm we have reached a current spot price today and a harvest price of £117–120 ex-farm and a November price of £123–125 ex-farm. These prices remain very volatile and change not just daily but by the hour. Remember the old adage – sell on a rising market, don’t wait for the peak – you may miss it!

This £25-plus turn around in two weeks can be attributed to a range of weather factors – particularly across Europe. Russia, the Ukraine and Kazakhstan have suffered extreme drought conditions as have Germany France and the UK. In Eastern Europe, where harvest has begun in some areas, particularly the Ukraine, they are currently experiencing heavy rainfall making harvesting difficult. Projected yield reductions have been across the board. Russia appears to have reduced its probable yield to 75MMT which is about a 25 percent reduction on last year but it defends its projection with a statement about significant carry-over. Hungary and Romania have also cut production forecasts in the past week. Strategic Grains has reduced projected production in Germany, France and the UK. It is now thought that in the UK the surplus wheat for export above consumption and new processing plants will not exceed 1MMT. Higher prices on the Chicago market have contributed to the current price rises as it has seen world production figures reduce and current high temperatures across its Corn Belt are causing concern. There is no doubt that quality wheat across the world will be in shorter supply in the year ahead.

It would appear to date, 2010 reduced barley production is suffering as a percentage higher than wheat which no doubt could put new life into the malting industry. Canadian malting barley production will be down to the lowest figure since 1965 due to its wet spring conditions. 2009 harvest malting barley sales to the malting industry are down 10 percent on the five year average so let us hope that lower availability of barley will spark some autumn buying.

Fertiliser Fragments

As we enter the harvest period there is a downturn in interest for fertiliser buying and it all goes quiet until land is cleared and farmers have time to think about new crops and what they might need as a base fertiliser. Nitrogen product prices are currently set to rise steadily towards the end of the year and there does not seem to be a surplus of available material. UK 34.5 percent AN is set for August at around £217 on-farm with a prediction of a further £4 rise in September although that is yet to be confirmed. Lithuanian 34.5 percent AN is not currently showing much discount against UK prices. Both producers are subject to gas prices that have been on the rise from Norway and Russia. Granular urea that has been selling at about £215–230t has increased and could well be £260-plus by the end of the year. A higher percentage of buyers than last year have already purchased Nitrogen. Phosphate prices as TSP have stalled at around £320–330t and despite a move by the producers for an increase in potash prices, 60 percent muriate is currently about £315–325 on-farm for a full load.

The Fertiliser Manual (previously RB209) in its new form is currently available. It can be viewed online at www.defra.uk/rb209 or ordered from the stationery office at www.tso.co.uk. I confess that although I have ordered my hard copy at £24.99 it has not arrived so I have not read it yet. I also confess to the weakness of needing a hard copy rather than a reading from the screen! Whether on-screen or in-book, it makes for good reading and when I have read my copy I shall make appropriate comments.