2018-2019 Wish List

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2018-2019 Wish List

2018 has been a big year for the agricultural industry, with the first Agricultural Bill in over 70 years, extremes of weather and large fluctuations in prices, but have there been any forward steps? In our last article of 2017 we were hoping for more clarity from politicians, workable trade agreements and certainty over the future of the Basic Payment Scheme (BPS), as well as the big one, some profit! So with 2019 nearly on our doorsteps, we take this opportunity to reflect on the past agricultural year from the highs to the lows.
It’s safe to say 2018 has been weather dominant, with a wet start to the year and a very cold Easter, followed by excessive periods of no rain. The hot summer caused an early cereal harvest, with some farmers finishing as early as the middle of August. Yields were lower than but not as disastrous as many had predicted with some land not being dissimilar to 2017. It was as you might suspect a year that was highly dependent on soil quality and the ability to retain water.  Crops that managed to get good root penetration in the previous winter fared better than later drilled crops that sat in a wet seedbed or spring crops drilled into dry conditions with no rain.
Through the series of Contract Farming Agreements we run here at Lister Haigh we have seen Winter Barley yield from 2.5 t/acre through to 3.7 t/acre, winter wheat from 2.6t /acre through to 4.0 t/acre, large variations in oilseed rape crops with anything between 1 t/acre through to 2 t/acre and some spring bean crops returning less than a tone to the acre.  Reductions in yields have by in large been offset by an increase in price, the weakness of the pound coupled with shortages on a global as well as a national scale had helped keep a bottom in the market.  Looking forwards those that looked to sell forward a proportion of their harvest for 2019 and secure fertiliser for the forthcoming season may have been wise, with many products being up almost £100/t on the year.  The recent announcement on the ban of metaldehyde from spring 2020 onwards will be a bitter pill to many.
Potato crops have faced challenges following the long summer, with some farmers struggling to meet contract tonnages whilst others are benefiting from a stronger free trade price. The premium many growers pay for irrigated land proved pivotal this year, Irrigation systems worked well throughout the drought however this may impact on 2019 where water restrictions may be brought into place, current water table levels are still below average.  In our region very little sugar beet is grown but fodder beet crops have yielded well with a strong market for those with animals looking to replenish feed stocks, prices are up from £15-17/t last year to circa £30/t today.
Renewables and Diversification
One local estates review of the renewables sector was interesting, solar power was prominent during the summer however saw a decline during a cloudy August. Large-scale solar deployment in the UK is set to re-Ignite next year as the technology continues to beat all previous cost estimates and could be as cheap as £40 per megawatt hour by 2030. The NFU have a desire to see profitable, resilient and diversified farm businesses through the transition to Brexit, and management of energy costs and investment in clean technology is a key part of this. The first electric tractors may be on sale in the EU next year and the escalating energy demands of battery cars could create opportunities for farmers to host charging stations.
Diversification on farms continues to bring more security to farm income and support farmers during the uncertainty of Brexit, especially farms diversifying into the tourism/hospitality sector with ‘staycations’ on the rise.
Beef and Sheep
The livestock industry has arguably had the toughest year following the extreme weather changes, with livestock losing condition, a severe lack of forage crops for many and barley being in short supply. The autumn weekly fat stock trade peaked at £2.50/kilo for top heifers, with Bulls at £2.40/kilo, live weight.  Lamb prices have come down from the highs of the spring but are still holding strong with recent market reports in our area for good lambs in the £1.75 – £2.20/ Kilo region.  Lamb store prices have remained strong and there certainly seems to be an abundance of stubble turnips this year!
Once again a large percentage of the lamb crop was exported with another decline in consumption, roast dinners are becoming a thing of the past and with more people living alone there is less need to buy top cuts of meat.  Pigs and Poultry have seen tightened margins as input costs rise.  There is a notion among many that the free range poultry market is just matching supply with demand, and is at risk of becoming saturated. A recent hot topic has been the methane produced by livestock and the damage to the planet.  It is hard to predict what will affect the industry the most, a repeat of 2018 weather, Brexit, or the media?
Following on from the Dairy industry’s positive year in 2017, 2018 continued to be positive – with the industry finally recovering from 2015. However, price cuts for January 2019 will have a negative effect on the industry, taking the farm gate price to 27-28p/litre.  Record late 1st silage cuts and a general lack of forage have meant many have had to open the already depleted clamps somewhat early, an early spring might be the only saving grace.  Arla are offering premium prices where less medications have been used, a current hot topic but arguably putting dairy farmers under pressure to choose over animal welfare or higher income. On a more positive note the Defra Countryside Productivity Small Grants Scheme, offering up to 40% grant funding, has been very popular and beneficial to dairy farms amongst others.
In summary another year controlled by factors outside of our control, price fluctuations, exchange rates and the weather to name but a few!
Looking forward to 2019 we are hoping for constructive implementation of the new agricultural bill, some certainly and more stabilised markets, targeted financial support to promote the industry and arguably most importantly a vote of confidence in British Farming!  With all the negative press reports recently perhaps it is up to us to champion the industry we know and love.

Wishing you all a merry Christmas and prosperous farming year from all at Lister Haigh.