AS WE approach May, we are still in the midst of cold winter weather with snow, frost, chilly winds and little sign of the weather warming up – but at least it has been drier this past two weeks, allowing land work to proceed to get spring barley and potatoes into the ground.
Barley seed certification to date is lower than last year and this suggests that Scotland’s spring barley area will be around 5% down. Looking at the bigger picture, if wet weather returns and stops further spring planting, there could be uncertainty surrounding the total acreage of spring barley planted for harvest this year.
As at December 1, 2015, 2.87m ha was estimated to have been planted to winter crops in the UK. Compared to previous years, this is the lowest acreage since harvest, 2013, when difficult weather conditions throughout the winter hindered plantings and crop development. However, winter planting conditions during autumn 2015 were generally good.
The reduction this season is thought to be due to economic and agronomic reasons, rather than weather.
Factors such as low commodity prices and delays in receiving payments under the European Union’s common agricultural policy will have had a bearing on planting decisions, as well as low price margins from the spring crop as soil temperatures are still low and will see delay in spring crop growth.
The decline in UK winter plantings was driven by falls in area of 4% for England and Wales and 5% in Scotland.
If the UK is to realise a similar total planted area of wheat, barley, oats and oilseed rape to last season, then this leaves around 850,000ha to be planted to spring crops – that would be the second largest planted to spring crops since 2001, behind harvest, 2013.
Canadian wheat planting is also at a six-year low and its spring wheat planting has been reduced by 6%, replaced with pulses due to stronger demand for lentils and field peas from India.
Dry weather conditions are starting to become a concern in Eastern Australia, where winter planting is imminent. Many areas have received far below normal rainfall over the past month, a pattern typically associated with the currently weakening El Nino weather event.
Without rain soon, the start of planting could be delayed and farmers may have to look at other planting options. In contrast, soil moisture is reported to be good in Western Australia, which has received four times its normal rainfall over the past month.
The uncertainty over Brexit and its impact on agriculture, due to the concern about what would happen to support for farmers and commodity values, is also having an impact on the UK farmland market.
That’s especially in England, where land prices have fallen by 3% in the first quarter of 2016. It is the largest quarterly decline since a 5% slide in the final quarter of 2008 at the height of the banking crisis.
For some sectors in the UK agricultural industry, the EU market is critical. For instance, 38% of all lamb produced in the UK goes to Europe and France alone purchased more than £200m worth of UK lamb in 2014.
The UK is a nett importer of agri-food products totalling £39.6bn in 2014 and we import as many more agri-food products from other EU countries than we export.
However, UK exports are significant – in 2014 we exported £12.8bn worth of products and approximately 73% of UK total agri-food exports were destined for other member states.
The grain and oilseeds markets recently have not been influenced by supply and demand figures but by fund managers risk reduction policies and profit taking as suddenly the realisation that Northern Hemisphere crop conditions are sound and expectations are for a robust wheat harvest later this year.
The Liffe July, 2016, old crop feed wheat futures last week were up 50p to £107 and for November were up 55p to £117.55 so the carry-over of £10 continues for those who want to hold their 2015 crop into the next harvest year.
UK ex-farm bread milling wheat was up £1.60 to £114 and feed wheat was unchanged at £103.10. Feed barley was up 30p to £100.30 and oilseed rape delivered Erith was up £1 to £289.50.
Brent crude oil futures climbed to a near five-month high last week of $45.80 but a strengthening of the dollar against a range of currencies capped further gains for crude oil futures. UK fuel prices which were below £1 per litre recently are now creeping up again to around £1.10 per litre.
The Brazilian government announced plans to scrap its 10% import tax on maize imports due to concerns over tighter supplies. The change in policy follows the recent concerns over dry conditions in Brazil which could potentially hinder its second /winter maize crop and this could allow the import of US maize.
High levels of rainfall across north-eastern areas of Argentina has hindered maize harvesting and heightened fears of more wet weather.
Oilseed markets are still focused on the potential impact of South American supplies due to the weather concerns in Argentina. Only 16% has been harvested compared with 46% at this point last year. The impact of 20 days of uninterrupted rainfall in key growing regions has reduced forecasts for output by 7%.