As we reflect on last year, when we requested more clarity from politicians regarding trade agreements, the future of the Basic Payment Scheme and profitability, it goes without saying we are no further on with receiving clarity on any of the above. If anything, the industry has experienced even more uncertainty this year. We can only hope the result of the General Election works in our favour and provides more clarity in the forthcoming year.
With this being said, the ups and downs for agriculture in 2019 cannot wholeheartedly be blamed on politics. As ever, the weather has been particularly pivotal over many enterprises’ productivity this year. The ongoing effect of this weather on 2020 crops, coupled with the growing concern surrounding ‘vegan vigilantes’ and the political climate, could lead to an interesting 2020, but for now, let’s review the year of 2019 for agriculture.
Cereals & Oil Seeds
With 2019 wheat yields reaching record highs in the UK and around the world, here at Lister Haigh we have reported field averages of up to 5 t/ acre. The market reflected this high supply with prices for feed wheat plummeting down to £121/ t ex farm post-harvest 2019 in the north east. Thankfully, this has increased since to circa £148/t ex farm this month.
This price increase is believed to reflect the likely possibility of there being little availability for domestic wheat in 2020; due to receiving more than the entire average rainfall for September in one week, which set the precedent for above average rainfall in October and November, which gave little opportunity to drill 2020’s cereal crops.
There is still a surplus of Winter Barley in the market this year and, looking forward to 2020, particularly seeing the deficit of wheat in the ground, there is a significant divorce between wheat and barley prices. From £5/ t price difference straight off the combine, to circa £20/ t difference this month at £130/t ex farm for feed barley.
Spring seed options have also been affected by these poor conditions for drilling, as the high demand drives high prices, which are forecast to keep increasing.
It has been turmoil for many oil seed rape crops in the north, as they took some hammering from the heavy rain pre-harvest, following its previous battles with disease and flea beetle leaving yields therefore incredibly variable. At Lister Haigh, nonetheless, we have seen yields of between 1.25 t/acre and 2.25 t/acre. Again, the weather has seen many oil seed rape crops looking poor as we approach the new year. We wait to see the effect of this on the 2020 price which is forecast to increase, but the 2019 price has steadfastly held higher this year than last, from around £347/t post-harvest to around £318/t this month.
As potatoes had gone in well, were planted in good time and received the rain we prayed for in last year’s harvest, the 2019 crop looked hopeful. However, this year’s potato harvest in the north has not brought any more joy than last years, with many reporting to have been conquered by the wet weather. Despite farmers perseverance, we are still sat with around 10% – 20% of potato crops still to be harvested nationwide, which would have usually been completed by the end of October.
On the face of it this years sugar beet & fodder beet crops should have benefitted from the higher than average autumn rainfall. Yields appear to be variable, with only small areas of beet grown in our region, and much left to lift it is hard to paint an accurate picture. As the beet campaign pushes on in to January 2020 sugar beet growers will be undertaking some keen number crunching to see if the crop remains profitable for another year given the contract reforms and British Sugars decision to cut back the haulage radius from Yorkshire down to their Newark factory.
Beef and Sheep
The livestock markets have been a continuous battle, with low prices affecting the ability for many to make a profit. With finished heifers climbing to around 197.1 p/kg and finished bullocks at 181.1 p/kg (live weight), prices are up on earlier in the year, but significantly down on last year. Lamb prices have picked up this last month with reports of prices being higher than last years, at around 186.3 p/kg, but it has been a battle to get there with the majority of the prices throughout the year being down on 2018.
An early Christmas present for British livestock farming was Waitrose’s promise to only stock the shelves with British lamb by 2021. We can only hope this creates a trend and other supermarket brands follow suit with supporting British farming, not only with lamb but other British produce too. However, the livestock industry has also had to prove its tenacity against the media and social groups, which disapprove of the livestock farming systems in the UK. Needless to say, these systems far exceed the care, quality and regulations of many other countries, but the industry must stay resilient, to prove its global unique selling point of high quality and low carbon.
Pigs & Poultry
Cull sows have climbed throughout the year to around 73p/kg. This is a significant market improvement since 2018 and a knock-on effect from China’s epidemic of African Swine Fever, which is predicted to have wiped out around 50% of their stock by the end of this year.
There is little sign of this epidemic getting under control, as it continues to work its way round North Korea, Vietnam, Cambodia, Laos, Mongolia, Hong Kong and Myanmar; meaning the cry for protein in Asia is getting louder, as the spread increases and cold stores run out. However, it is not all good news for the UK livestock market, as the demand for protein in soya is also increasing, which is a valuable protein source in much of the UK’s animal feed, meaning purchasers will feel the impact of globally increased soya prices. This is not helped by the weak pound, which is currently increasing the costs of imports.
The poultry sector has reported another year of increased numbers of broiler units in response to the high demand for white meat and layer units, alongside free-range units, as producers prepare for the retailer commitment to phase out cage produced eggs by 2025.
It is pleasing to report that the dairy industry has maintained its resilience this year. The rise of alternative ‘milk’ products has not yet affected the demand for dairy produce with farmgate prices still around 30p/litre and freshly calved Friesian Holstein heifers reaching 1800 regularly and an average of £1,400. Many this year have also achieved three decent cuts of silage, which should hopefully limit the need for concentrates, which were needed last year.
The dairy sector of the livestock industry is particularly feeling the pressure for reducing the use of medications and is subject to tighter control measures through the Farm Assurance Scheme, milk processors and the Food Standards Agency. On the environmental side, it has never been more imperative to record muck and slurry use, to stay compliant with the Farming Rules for Water, NVZ rules and Farm Assurance checks.
At Lister Haigh, we welcomed the release of the Rural Development Programme which opened for applications from the start of November, as we encourage our clients to consider the benefits of diversifying in these uncertain times. Although the risk surrounding diversifying can be daunting, the possibility of a secure and consistent income can only have a beneficial effect on, not only the farming enterprise but also your personal welfare. However, when planning diversification ventures, it must be kept in mind that we appear to have provided enough visitor accommodation options in the north of England and funding is now directed towards other tourism projects.
With this in mind, looking into 2020, we hope for those within the agricultural industry to sustain a united front, which promotes the benefits of consuming British products both to the domestic and international markets. This is with the aim of improving the prices achieved for produce that is marked as high quality, British, produce.
What would be most welcomed, is to receive support in this from the wider general public and media fronts. We believe this would aid the relationship between farmers and the public, to work together constructively and create an industry which is both environmentally and financially sustainable.
On that note, from all at Lister Haigh, we wish you a very Merry Christmas and a Happy New Year!