Questions raised as Asda slims down milk pool

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My previous blog posting observed how laid back fertiliser manufacturer Yara seemed to be about being jilted by Terra, its partner in GrowHow, in favour of a better merger off from a rival suitor.

The same cannot be said of dairy farmers involved in another partnership - the Arla Foods Milk Partnership - who have been similarly jilted by supermarket group Asda.

arla milk.jpgWe've taken a number of calls from farmers in recent days, aggrieved by the short notice they have been given of the change, by the cursory nature of the letter they received, the lack of clarity about the criteria used and the fact that they are to receive 1p/litre less for their milk from 1 April.

Asda brushes this all off, saying it's just a review of its supplier base to establish a more consistent core pool of milk producers - something it does from time to time anyway...

"Business as usual" says jilted Yara

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One has to admire Norwegian fertiliser manufacturer Yara's sense of "sang-froid" given all that has happened in the past six weeks.

At the time of its initial bid for US rival Terra Industries in early February, the company insisted it was "business as usual" as far as it's UK operations were concerned.

Fertiliser bags.jpgThat was fair enough given that the deal was pretty much a done deal and bearing in mind Yara's existing relationship with Terra - the joint venture they have in GrowHow UK.

But then came news in early March that there was a rival bid on the table, from US fertiliser giant CF Industries, and that this bid was a superior bid.

Yara's response to what must have been a severe blow to the corporate knackers was a controlled "no comment" while directors conducted an evaluation.

And now the news has emerged that Terra has terminated its proposed merger with Yara (worth $4.1bn) and entered into a definitive merger with CF Industries (worth $4.7bn)...

The joys of applying for single farm payment

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Checking through the SPS application form must be one of the most dreaded tasks any farmer has to undertake during the course of the farming year.

And as an agricultural journalist, writing our annual "SPS special" in Farmers Weekly is also one of my least favourite jobs.

SPS form.JPGFirst there is the briefing with the RPA - stuck in a small room in Reading with four civil servants, plus two more by video-link from Newcastle, advising me as to this year's changes. (I did feel a bit outnumbered.)

Then there is the job of deciphering my notes and cross-checking this with the briefing notes handed to me at the RPA and the guidance booklet which arrived in the post a few days later.

And then it's time to write it all up - 2500 words of elegant prose on a subject I find, quite frankly, mind-numbingly dull....

Countryside in danger if SFPs reduced

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The recent document from the EU Commission on the possible consequences of policy change over the next ten years makes for uncomfortable reading.

The report, which is an update of an earlier study in 2006, (the Scenar 2020 study), sets out three scenarios:

countryside 2.JPG• A "reference" scenario, with a static CAP budget, a 30% cut in direct payments and a 105% increase in rural development funding
• A "conservative" scenario, with a static CAP budget, a 15% cut in direct payments and a 45% increase in rural development funding
• A "liberalisation" scenario, with a 55% cut in the CAP budget, the total removal of direct payments, market support and trade barriers, and a 100% increase in rural development funding...

How well do you know your farming acronyms?

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My last blog posting on the recent Andersons spring seminar focussed on how useful and interesting the session was, and how effective the key speakers were.

But three hours is a long time to concentrate when the sun is shining and it's Friday afternoon, and my mind did start to wander a bit during the paper on "Opportunities from Regulation".

Thumbnail image for Alphabet_soup.jpgNormally when this happens I resort to the list of delegates, and mark a cross by the people I recognise or want to catch a word with at the tea break.

But this time I turned to the back of the conference booklet where my eye was drawn to the "glossary of acronyms", listing many of the different acronyms commonly used in agricultural parlance. I decided to test myself.

Given my 20 years-plus in the industry, I was pretty confident I'd get most of them right...

Crash course in agri-business from Andersons

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Yesterday (Thursday) I had the pleasure of attending one of the Andersons spring seminars at Salisbury racecourse on Opportunities in a Changing Agriculture.

Surprisingly it was the first of these annual events I'd been to - and sadly one of the last that well-known agricultural consultant and analyst Francis Mordaunt would be giving before his impending retirement.

Francis Mordaunt 5.JPGExplaining complicated issues in simple and engaging terms is a gift, and one that Francis has in abundance.

In just 30 minutes he gave a crash course on the current state of British agriculture, encompassing most of the external factors affecting it, giving an assessment of the health of the industry and providing some useful pointers as to where we might be heading.

The key points were as follows:

* UK farming has weathered the recession better than most sectors. Total Income From Farming (TIFF) in 2008 and 2009 came to over £4bn each year - well up on the £2-3bn seen in the previous eight years.

* At this level, TIFF was finally in excess of direct payments, showing that farming is making a small profit even without subsidy...

British exporters put in a sterling performance

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Everyone knows that a weak pound is good news for British agriculture.

Primarily because of the weakness of sterling, farm incomes in England last year were limited to just a 6% fall, despite the slump in global commodity prices, while farm incomes in Wales enjoyed a 60% increase.

euros.JPGSo yesterday's jitters for sterling on the foreign exchanges, amid fears of a hung parliament this summer, will have been viewed with some satisfaction by many in the farming industry. (The pound reached a ten month low against the dollar and a three month low against the euro.)

The effect of the weak pound can be clearly seen in latest figures from UK Trade and Investment - the government department responsible for international business development.

These show that meat exports rose by 9% to £1.27bn in 2009, while fruit and veg exports were up 10% to £763m and cereal and animal feed exports were up 3% to £2.35bn...

Egg producers in a flap about unfair imports

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Concerns about the threat from imports of eggs from hens kept in conventional cages were very much in evidence at this week's NFU annual conference.

The fear is that, with the UK well on the way to complying with the EU regulation that will ban conventional cages from 1 January 2012, other member states are dragging their feet.

eggs.jpgPoland in particular, where just 100 of the country's 600 commercial units have started to replace their conventional cages with new enriched ones, is already seeking a five-year extension to the new rule. And it is likely that other new member states will soon join them in demanding similar exemptions.

NFU poultry board chairman Charles Bourns told delegates this week that over 100m hens are likely to still be in conventional cages in Europe in 2012, giving those producers a massive cost advantage...

Positive messages from the NFU conference

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Assemble a bunch of farmers and a bunch of politicians in a room together, and don't expect to find a whole lot of positivity.

That was certainly the case in the morning "political" session at the NFU's annual conference on Tuesday. Despite valiant attempts by president Peter Kendall to remain upbeat, it was not long before the delegates started castigating the invited MPs for their manifold failings.

NFU conference.jpgFrom badgers, Brussels and battery cages, to red tape, retailers and the RPA, many of the industry's usual gripes got a good airing. One group of farmers from the south-west even stood to attention during DEFRA secretary Hilary Benn's speech, wearing black armbands with TB written on them, in protest at the government's policy on animal health.

It was therefore refreshing to move on to the afternoon "business" session of the conference where some much more positive messages were in evidence...

The joys of farming conferences explained....

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Columnist David Richardson has been waxing lyrical in this week's Farmers Weekly about the joys of February conferences - and the "chance for malice-free mickey-taking" that they present.

They are very much part of farming life, he explains, and a crucial opportunity to catch up on recent developments, exchange business ideas and, of course, engage in a spot of banter with kindred spirits.

Thumbnail image for ciy food lecture.JPGAs agricultural journalists we go to our fair share of conferences too.

Unfortunately for us, they are usually more about work than pleasure and its pretty much "heads down", capturing those words of wisdom and then deciding how best to present them for a multi-media audience.

My recent trip to the Sentry Conference at Chilford Hall, Cambs was a case in point, with six excellent speakers taking to the podium during the course of the day...

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