USAs 5% set-aside
US farmers have opted to put over 10m hectares (25m acres) into 10-year set-aside under the conservation reserve programme, much to the chagrin of grain traders.
Though this will be scaled back by the US Department of Agricul-ture to about 7.7m hectares (19m acres), that still represents about 5% of the US crop area. Further offers to CRP are expected in the future.
Though this will not affect the coming harvest, US traders have rounded on the move, which, they say, will lead to a loss of export markets in 1998. They have demanded that CRP be capped at 4.86m hectares (12m acres).
Few in Washington expected farmers to respond so favourably to the new CRP, especially since most wheat ground will be getting about 20% less compensation at $40/acre (£25/acre).
"It seems farmers are willing to take a reduced government payment on CRP land, rather than risk farming it under the Freedom to Farm Act," said one USDA economist.
lUK grain prices have slipped further this week, with recent rains boosting crop prospects and sterling being even more invigorated by the change of government. As FW went to Press on Wednesday, old crop wheat was back to £88-£90/t spot, and new crop slipped to £92-£94/t for November. *