Grain Markets: Wheat: Since mid-June November UK prices have dropped and returned to the same level in cereals, with a £10/t firming in rapeseed price. Recent small gains have been in response to a number of weather uncertainties for international grain producing regions supporting prices but tempered by knowledge of adequate stocks to use ratios. Cereal prices are around on-third below those of two years ago and NFU is active in supporting market access and pursuing measures to help keep escalating input cost prices competitive for British farmers.
Oilseed specifications: During the Summer Euronext sought views on changing EU futures specification for rapeseed contracts, seeking to abolish the moisture content bonus and increase the threshold for oil content from 40% to 42% before a bonus was paid, NFU lobbied directly against this and prevailed.
New regulation of forward grain sales: Regulators have listened to NFU concerns that farmers selling (or buying) commodities forward may have to register with national authorities for Licences and Exemptions and as a direct result have proposed changes to the legislation. NFU has lately won new flexibility for farmers and smaller traders using futures markets in over 1,500 pages of draft EU financial markets guidance from EU regulator ESMA in late September. However, many of the final decisions on how regulation will affect futures contracts have been pushed back to national regulators and market participants, including farmers, merchants and processors. NFU will continue working to ensure the European Parliament and Council approve the changes to MiFID II and that the UK Financial Conduct Authority avoids unnecessary and onerous bureaucracy for farmers who want to manage price risk in purchases or sales of grain as it implements new rules during 2016.
Biofuel: NFU is meeting MPs this autumn explaining why the UK Government should now step-up and increase biofuel inclusion rates in the UK now the EU has addressed the contentious indirect land use change question, and include biofuels from crops in post 2020 EU legislation. Another obstacle often quoted by UK government had been “Food v Fuel”, but with a growing biofuel industry and now with data collected over the long term we can see that claims there is a conflict are not backed up by reality as more grain has been produced, stocks to use ratios are high, mandates for biofuel and its use has grown while grain prices have been decreasing.
Fertiliser: An alarmingly wide gap between farm-gate and international fertiliser prices is opening up, particularly for phosphate and nitrogen products, but stable for potash according to NFU analysis of AHDB and FAO data. This is in addition to the episode where UK exported of significant quantities of ammonium nitrate over the 2014/15 winter period which was reported to HMRC at values well below prices quoted to UK farmers. NFU has written to the EU Commission seeking improved transparency in market data and challenging the existence of fertiliser tariffs on P and N fertilisers. We have also requested more and regular analysis from AHDB on fertiliser markets.
Grow How was a 50:50 CF / Yara business, Yara has now sold its stake making the UK’s AN manufacturer 100% owned by CF, a north American manufacturer, and its only operation in Europe. CF reportedly paid $648m – last year’s earnings were $156m, which appears to be a 12% annual return on investment.
Oilseed rape pest pressure: Plantings in 2014 were affected by widespread infestations and damage from Cabbage stem flea beetle (CSFB), resulting in a net additional cost of £16 million estimated by Rural Business Research for foliar applications against insects over using seed treatment.
On behalf of Members, NFU successfully applied for emergency use for two insecticide seed treatment products, Modesto and Cruiser OSR for 2015 planting of winter oilseed rape. The authorisation eventually involved written agronomist recommendations and agreement for users to provide data on location of sowing and was limited to around one third of the area of four counties with some of the most pest-affected crops in England. One environmental campaign group has repeatedly pressed for Judicial Review of Defra’s decision to authorise limited and controlled use of neonicotinoid seed treatment, so far without success. NFU is also providing information to bring balance back to a highly emotional debate around neonicotinoids.