Agri Facts Blog
Agri Facts Update | 27 June 2017
The emerging direction of post Brexit agricultural policy
We are probably all weary of politics, but the future of post-Brexit UK agricultural policy is starting to materialise from Westminster. A new Agricultural Bill was laid before parliament within the Queen’s Speech and this will outline the future of UK farming as we go forward following Brexit. The NFU see this bill as a once in a generation opportunity to shape the future of the industry and it is hoped the politicians listen to the industry’s concerns; this is imperative as Michael Gove, the new Secretary of State for Defra, ruled out an independent review and promised to take things forward ‘in-house’.
Gove’s appointment within Defra is interesting, as he is a high profile politician. It is hoped this is recognition of the significance of agriculture and the environment going forward post-Brexit, rather than a place for him to prove his allegiance before moving on to bigger and better things. Gove gave some indication of future policy when speaking on the Farming Today programme. During the interview he reiterated that farm subsidy support will be maintained at existing cash levels until 2022. After that, he has spoken of a desire to design a better system to protect and enhance the environment and to promote the opportunities for producers. He repeatedly stressed the importance of environmental considerations, so the promotion of natural capital through farming could well increase. This will provide opportunities, but if the current mid-tier scheme is an indication of potential environmental policy, then opportunities for grassland will be limited in SDA and non-SDA regions. Alternatively, it is hoped the ‘payment by results’ trial running in the Yorkshire Dales National Park is a success. This scheme allows farmers to manage land with ‘no prescriptions’ to target specific environmental benefits; agreed compensatory payments are made if measurable ‘health score’ targets are achieved.
As we move forward with Brexit, trade negotiations will be to the fore. Mr Gove went on to emphasise the need for tariff free trade with the EU and other potential markets. This makes our produce competitive abroad, but of course it opens up the UK market to global competition. To safeguard the future of UK producers, Gove wants to enhance the quality, provenance, high welfare and environmental benefit that UK agricultural produce provides. This is possible as the export of ‘quality’ UK produce continues to rise, but the benefit of this is generally achieved by processors. We need to ensure a fair share of this is passed on to primary producer. Marketing is difficult for the individual, so farmers need to foster relationships with processors and be prepared to respond to what the market requests.
If you’d like to chat more on this topic, why not contact me either via my mobile 07836 233042 or email me direct – I look forward to talking to you.
Dr Nick Prince
AECS funding (Scotland) available for standalone slurry store applications until 30 June 2017
I’m currently reading the Folk of the Faraway Tree to my five your old son. If you aren’t familiar with the book, mysterious lands appear at the top of the magic tree and disappear with little warning. Capital grant aid for farmers is similar to this – it appears with little warning and has gone again in no time at all. Earlier this year we had the slurry store roof scheme and currently the Scottish Government is offering funding for Slurry Storage systems. Blink and you miss it as applications need to be in by the 30 June 2017. We are happy to discuss applications with you, but the point of this blog is to encourage you to consider the type of capital work you would be interested in applying for. If you register this interest with us, then we will be able to act quickly when the pots appear at the top of the magic tree! Link to Rural Payments website for details
Please call me on 01228 406260 to discuss in more detail.
Dr Nick Prince
Things appear good in farming right now, but there are dark clouds looming on the horizon. Why don’t you come and join H&H Land and Property at our inaugural on-farm conference at Buckabank Farm, Dalston on Tuesday 4 July. We will be joined by other experts to discuss how farm businesses can become more resilient as we prepare for the post-Brexit world. Click here for further information and to reserve your place
Milk prices remain favorable with an average UK price of 27.69 ppl, which is over 22% higher than the same time last year. However, four main processors (Arla, Barber, Payne’s and Pensworth) have all indicated lower payments going forward.
Trade for Limousin cattle has been exceptional at two recent Borderway sales. 128 bulls were sold to an average of £7,712.70. This is notable as many purchasers were recognised commercial producers indicating confidence (and money) in the sector. Conversely, it remains a difficult task to turn a profit on beef and sheep enterprises when subsidy income is excluded.
New season lamb prices are decent, with a number returning in excess of £2.00 p/kg or £100 per lamb. Good returns at this time of year are linked to low numbers hitting the market. The price is likely to fall as we head into summer and the number of finished lambs increases.
Applications for the Small Dairy Farmers Scheme need to be received by the RPA before midnight on the 31st May 2017. The Mid Tier application window is still open and it is a good time to be looking at this before things get busy over the summer! Water Capital Grants for things like roofing over silage pits or re-concreting yards are available as part of Mid Tier, if the farm is in a high priority target area for improving water quality
The land market has got off to a flying start for the 2017 marketing season with a number of farms being marketed across the North of England and Southern Scotland. Our Durham office is launching a 330 acre holding in Northumberland in late May which is already receiving a high amount of interest off the market. There are a number of deals being conducted off the market in areas of high local demand and it is essential that buyers register with agents to ensure that they don’t miss out on local opportunity. Simply contact your nearest office to register on our buyers’ database.
Dr Nick Prince
Article 50 has been triggered with huge implications for agriculture in terms of subsidy, trade and employment. Agricultural exports continued to grow, with the five main trading partners all being members of the EU (Ireland, France, Netherlands, Germany & Spain). However, China, Russia, the USA, Japan and Mexico are the largest importers of dairy, beef and sheep products on a global scale. There will be opportunities out there.
Up-coming deadlines – Hedgerows & Boundaries (28th April) and Higher Tier (5th May). The window for Mid-Tier applications is open and runs until 30th September 2017. More demanding than the old ELS scheme and competitive. However, low up-take has meant most applicants have been offered an agreement. EU & LEADER funding – it is useful, but complex. Examples of possible funding include LED lighting Systems, EID systems, robotic milking systems and GIS for manure / slurry applications – best to give us a call on this one.
The annual grass lets season is upon us with prices similar or slightly higher than last year in part due returning confidence within the dairy sector. Good land is realising £120 to £140 per acre with average land in the £100-£120 bracket. The annual grass let auction will be held in Ring 1 at Borderway on Wednesday 5th April 2017 at 1.00pm. Auction includes 310.25 acres of grazing and mowing land and the sale and letting of Brough Marsh stints.
Further changes to permitted development rights extending the ability to convert agricultural buildings to create homes are proposed. As usual with these matters the devil is in the detail, so we await the publication of detailed legislation with anticipation. Planning application fees are scheduled to increase by 20% in the Summer. Visit H&H Planning website for more info…
Figures suggest around 15,000 sheep were killed nationwide by loose dogs in 2016. Stock thefts are also common and H&H Insurance Brokers encourage farmers to cover their business for all possibilities. To discuss your insurance needs phone 01228 406290.
Dr Nick Prince
Last time I discussed the good trade for pedigree stock, but these headline figures can be misleading. Underlying economic figures are gloomy with record sector borrowing and year on year falls in farm income and profitability. Suggestions that figures have improved in 2016, based on the favourable exchange rate and the lower cost of fertilisers and fuel. The latter two are likely to rise again, but there are predictions the exchange rate will remain low.
The BPS season is just around the corner, with interest in entitlement trading increasing – remember, entitlements not used can be lost, so best to trade any surplus. The application for the Countryside Stewardship Hedgerows and Boundaries Capital Grants is now open with funding of up to £5,000 available. The application window for this is open until 28th April, so potential applicants need to get their skates on!
Two recent government announcements of interest – firstly, the housing white paper and secondly, proposals for 14 ‘garden villages’ to create up to 48,000 homes across England. This has direct local relevance, with two proposed sites in the north-west – Bailrigg in Lancaster and St Cuthberts to the south of Carlisle. Details are slow to be released, but those potentially influenced by the projects should look out for further consultation and a call for expressions of interests. Delighted to announce that H&H Planning have a new website – visit the team here… if you’d like to get in touch.
Good reports for prime stock sold through Borderway (13th Feb). Lamb prices are generally higher at this time of year and prices have firmed recently; a consignment of Dutch Texels reached £107.80 (256.7p/kg) with Blackface lambs at £77.30 (176.3p/kg). Good trade for cattle, with a prime British Blue bull realising £1,899.27 (224.5p/kg) and a Limousin X steer reaching £1,606.05 (232.5p/kg). Upwards trends continue in the dairy sector as First Milk confirmed price increases for February of 0.85ppl to 0.95ppl – they claim this is a rise of around 11ppl since June 2016.
2016 was a good year for H&H Land and Property, with sales circa £33m for the calendar year – a significant rise on the previous year and highlights confidence in the rural sector. A breakdown reveals sales of 16 farms (over £17.5 M), 51 lots of bare land or land and buildings (over £9.3 M) and 13 smallholdings (over £5.9 M). 90% of these lots sold at, or above guide price with strong sales in England and Scotland.
The concept of ecosystems services or natural capital continues to be discussed in debates on post-Brexit policy. I can see the benefits of this for policy makers as it allows those who wish to produce food to do so. It also offers a framework of support for those in marginal or environmentally important areas. One item that raised an eyebrow was a call for an increase in the power of National Parks to help manage natural capital – the industry’s opinion on this is likely to be mixed.
To chat through any farming matters and issues, please contact me via my mobile 07836 233042 or email me direct or come and chat to us on the H&H Agri Business stand at the Dairy Expo event, Friday 10 and Saturday 11 March 2017.
Dr Nick Prince
Our First Blog from Nick Prince, Senior Farm Business Consultant
Hello folks and all the best for 2017…
It is probably worthwhile introducing myself at this stage as Dr Nick Prince and I join H&H Land and Property as Senior Farm Business Consultant with a mixed background in academia, education and importantly as an active farmer in the Yorkshire Dales. I say importantly as this means I fully understand the on-ground issues affecting farmers.
So where to start? Well Brexit is pretty big, and a lot of talk about the potential long-term impacts. In the meantime, things aren’t too bad: BPS payments are rolling through (at least in England); the low value of the pound has seen a significant rise in receipts; and, farm-gate commodity prices seem stable.
Pedigree stock returns have been high and congratulations to all involved; a worthy return for hard work and dedication. To those not familiar with the industry, paying £60,000 for a Beltex Ram probably seems quite surreal. Arguably the best confirmation out there, the typical Beltex lamb will be worth around £100 (£2.00+ per kg) through the fat market – so the sire needs to be prolific to recoup the money. The value of the ram will of course be in its breeding progeny and the increasing use of embryo transfer and artificial insemination technologies can increase the efficiency of these genetically valued bloodlines.
The dairy sector continues to operate within fluctuating markets, but 2016 saw price rises. The UK average for November was 25.62 pence per litre (AHDB), but tight margins for producers remain. Some optimism is being shown by processors, with the Wensleydale Creamery looking for more local producers to bolster production.
Some additional pots of funding are available to farmers, such as the Farming Ammonia Reduction Grant Scheme (100% grant available for slurry store cover projects – get in touch if you need more information). The LEADER element of the RDP remains open and offers opportunity for creative thinking.
The aim is to continue my blog with a regular update every six to eight weeks. It would be good to hear comments and feedback to help us provide information relevant to you – so please get in touch via email or my mobile 07836 233042!