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A Year of Highs and Lows- Santa’s Wish List For 2018

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As we write our last agricultural news article of 2017 we take the opportunity to look back on the highs and lows of 2017 and look forward to what some may have on their list to Father Christmas for 2018.

The Dairy industry has arguably had the most positive 12 months with the DEFRA published average farmgate price of 32.34 p/litre in October 2017 being 8.14 p/litre up on the same date in 2016.  Any enthusiasm over this rise is soon diluted as dairy farmers still work tirelessly to re-pay large overdrafts and other un-secured debts.  Rumours of a potential price cut in late December / early January will surely mean others will proceed with caution before embarking on any spending that is not 100 % essential.  The Beef and Lamb sector has seen a year of stagnation, deadweight average steer prices have risen by a mere 3% (363.7 P/kg 2017, 352.9 p/kg 2016, AHDB December 2017), with the Lamb sector showing an even lower 2.8% rise on the year (398.5 p/kg 2017, 387.5 p/kg 2016, AHDB December 2017).  Both have followed seasonal trends with the exception of the Lamb trade peaking at an average deadweight price of 509.4 p/kg in June of this year.  Finished pigs did peak slightly in the summer of 2017 but look to be returning slowly to circa 152 p/kg deadweight, the same as this time last year.

In the Arable sector the weakness of the pound has again pushed cereal prices slightly up on the year with feed wheat in our region averaging £138.50/t as at 13th December 2017.  The closure of the Vivergo Fuels Bioethanol plant in Hull will no doubt have an adverse effect on wheat prices in the region moving forwards.  Oilseed Rape has taken a rather dramatic fall over the course of the year to just under £300/t, this will once again bring into question the profitability of including this in the farming rotation.  One such alternative break crop that growers in the region are hoping may prove a possibility is sugar beet.  As rumours circle over the potential for a new plant at Allerton Park, growers in the south of the region are starting to experiment by sending beet down to British Sugars Newark factory.  This may have contributed to a national 33% increase in the growing area for 2017 and an estimated record yield of 1.4 million tonnes of sugar.  Finally the volatility of the UK potato market has shown its nasty side in 2017.  Near perfect growing conditions has led to bumper yields and, with oversupply a plenty, potato merchants seem to be able to name their price.  We understand some growers in the region have opted against harvesting the last of their crops as the cost of harvesting and storage quite simply outweighs the likely sale price, this may be storing problems for 2018!

Turning then to 2018, what will be on farmers wish lists come the 25th December?  To name but a few, our thoughts, here at Lister Haigh, include: some clarity from politicians, workable trade agreements with the EU and the rest of world, certainty over the future of the Basic Payment Scheme (BPS), clarity of likely timings for BPS and Countryside Stewardship payments, sustainable commodity and livestock prices, less market intervention, and most importantly some profit! An increased supply on the land market would also be nice, this would help to stabilise prices and give young farmers a chance to get on to the ladder, after all, without them what does the future of our industry hold?

Wishing you a merry Christmas and prosperous New Year from all at Lister Haigh.  We look forward to working with you in 2018.