DAVID RICHARDSON
DAVID RICHARDSON
Opinion seems to
agree that, if the
weather stays
favourable, the
potential is there for
above average yields
this year
IF yield were the only factor governing arable profits most of Britain would be heading for an excellent year. My own recent travels have been restricted to East Anglia, but I have spoken to several friends who live or have been further afield and their assessments are similar to mine: Given average weather from now on the potential is out there for above average yields.
Winter wheat is looking promising, especially so after a couple of seasons when it was dreadful. This year there are far fewer undrilled patches, left because of wet planting conditions. Crop health seems OK and generally sizeable ears appear to be filling well. The fact that there are a lot more hectares in the ground after last years forced fallow on many fields is, of course, the other side of the story that, despite the promise of useful yields, will almost certainly lead to disappointing cash returns.
Winter barley looks good, too, if a little too thick for optimum yield. Thankfully, ours is all still standing despite the 20mm of heavy rain we had in a couple of hours in a violent thunderstorm a few of weeks ago. Crops have already begun to senesce providing a timely reminder that even though there is still a lot to prepare, harvest is not far away.
But root crops look best of all. The past few weeks of regular rains were just what they needed and many potato fields are magnificent. One large grower commented to me at the Norfolk Show last week that "they look too damned well", obviously reflecting the probability that yields would be high and prices low. Sugar beet, too, has recovered well from the six-week drought that began at Easter and most were meeting across the rows by mid-June, a couple of weeks ahead of the rule of thumb that says they should do so by the end of the month.
So, that is the good news. I have already referred in passing to the likely bad news about prices. But might there, perhaps, be further snippets of good news to drive away some of the gloom as harvest approaches? What about the drought across wide areas of the wheat belt of North America, for instance?
Reports suggest that northern and western states are still suffering and that yields will be seriously down, although there has been some rain in the central wheat belt and floods in the deep south. Taking all this together the USDA estimated a couple of weeks ago that the American winter wheat crop will be 5% lower than last year and 23% below the five-year average. Some areas have worsened since then and there are similar drought concerns for part of the Canadian crop.
Nearer home, recent travellers to Europe have reported drought conditions in parts of Scandinavia and floods in some former Soviet Union countries.
It is churlish to revel in the misfortunes of fellow farmers in other countries, but we live in desperate times. However, despite likely lower yields and quality in those regions, the trend of world wheat production is still upwards. Most of Europe is expecting above average crops, India could have wheat available for export, and eastern Europe, including Russia, is also said to have a likely significant exportable surplus.
Sorry! I appear to have slipped back into bad news again. Lets try for something better.
Maltsters are said to be very worried at all the talk of significantly increasing set-aside. Much of the motivation behind the talk, which in many cases has matured into firm plans, is to cut out second wheat and all barley in favour of only higher yielding first wheat. Were this practice to become widespread supplies of malting barley would be scarce and maltsters are worried they might have to pay significantly higher prices for imports. They will, no doubt, quickly realise what they need to do to the prices they offer to UK growers to avoid that.
But as I write, three days before July 1, all eyes are on the comparison in values of the k and the £. A more beneficial rate of exchange could go some way to reduce the disadvantage between the UK and the euro-zone for the next 12 months at least. Although Prime Minister Blairs trust factor, having slipped so much because of recent political events, may delay the referendum on Britain joining the euro-zone and the possibility of achieving parity.
But if, as seems likely as I write before that crucial day, the k is valued at about 65p, there will be some modest benefits for UK farmers. Area aid and guaranteed prices are fixed for the following year on that date according to the rate of exchange between our currency zones. By the time you read this modulation charges could have been more than cancelled out by the added value of IACS cheques, the guaranteed price of milk might be up more than 1p/litre, and so on.
Hardly enough to make you throw your hat in the air, but better than another smack in the mouth from DEFRA secretary, Margaret Beckett, and Chancellor, Gordon Brown.