Market prices: 2019 performance in review

It’s the time of year when many farmers will run their finger down the sales column and reflect on the times they managed to sell before a dip in trade and the times when they sold at the bottom of the market.

Once again, the weather has been one of the primary drivers in commodity prices, with wheat currently on a strong run after a torrid autumn planting season.

Lamb values are also sharply up following a good grass-growing summer, which means above-average numbers have been slaughtered for the time of year and buyers fear supplies are scarce.

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Brexit deadlines that came and went played their role by accelerating the pace of exports and causing stockpiling that reportedly contributed to the fall in beef prices.

With the passage of prime minister Boris Johnson’s Withdrawal Agreement Bill now a near certainty, traders no longer have to fear the imposition of EU import tariffs in January, but will be closely following developments in trade negotiations with the bloc throughout 2020.

Here we take a look back at how prices have moved since the beginning of the year:

Wheat

Britain’s biggest cereal crop peaked in price in the second week of the year and touched rock bottom during harvest. Since then, it has seen almost weekly gains as fears grew about a dwindling crop area at harvest 2020, with the AHDB predicting at least a 9% fall.

Growers chasing a milling premium may have been pleased with the bonus over feed wheat opening from a miserly £7.81/t in January to its widest point of the year in early July of £24.08/t, but it has since fallen back to less than £15/t this week.

 

 

Finished beef cattle in a straw yard

© Tim Scrivener

Beef

Beef finishers have arguably had the most challenging year of all the major farming sectors. Prices slumped from May onwards and remain well below year-earlier and five-year average levels.

Producers will be pinning their hopes on falling production levels next year to allow prices to recover, as well as rising export tonnages to be maintained.

 

Flowering OSR

© Tim Scrivener

Oilseed rape

With the drilled area for 2020 at a 16-year low, rapeseed buyers in the UK are set to increase the amount they import from overseas to more than 0.5m tonnes next year.

Prices for the year ahead will therefore continue to be closely linked to the global price of oilseed rape and other oilseeds, as well as shifts in the value of the pound relative to other major currencies, with traders currently forecasting the value to rise in early 2020 as Ukrainian exports dwindle.

The sharp fall in February was due to a strengthening of the pound and the temporary shutdown of a biodiesel plant in France, which led to more wheat being traded into the UK.

 

© Tim Scrivener

Barley

An increase in the size of the barley crop and limited access to some big export markets has kept the price of barley depressed this year, which will have benefited livestock producers, but meant there has been little to no margin in the crop for many growers.

With the crop area forecast to rise again next spring after many winter crops were not established due to the weather, it remains to be seen if prices have further to fall in 2020.

 

Finished lambs in an auction pen

© Tim Scrivener

Lamb

Specialist end-of-season finishers are clearly expecting prices to continue the current upward trend, as store lamb prices have been selling for high prices in recent weeks.

The 31 October Brexit deadline saw fears that the EU would impose swinging import tariffs at the peak of selling season and led some farmers to push more lambs out than normal which, along with excellent grass growth in summer, means buyers fear supplies will be tight until the 2020 crop begin to be sold next summer.

High global prices have also caused lower-than-average imports from the southern hemisphere.