Rising Prices

Weather or not

Remember my comments a month ago; and remember also that I am writing a month before you read this. How do you remember  the weather in June? We had a week away in Devon in the middle of the month and that county was rapidly rehydrating whilst we were there!

There was above average rainfall in June, even in the driest eastern counties, arriving (just) in time to coincide with grain fill of most crops, helping to lift some of the earlier pessimism about yield prospects. However, soils remain very dry at depth due to rainfall of only 55-70% of normal for the March-June period. Bedfordshire was one of 5 counties officially declared a drought area.

Soil moisture deficits remain at around 120mm (6”), and cracks are still evident in fields. So, with 2-3 weeks of wheat grain fill remaining as I write, a return to drier weather could have further impacts. Temperatures were cooler throughout June helping to prolong grain fill, but the unsettled weather resulted in reduced sunshine, which is also a key aspect of determining yield.

Not simple is it?

 

Oakley: a month in the life of a wheat plant

My comments above cross over to this section. Our Polehanger crops look remarkably well considering the moisture defecit. However, if you look into the field, rows are still evident rather than a carpet of ears. This is the result of the aborted tillers that I mentioned last month.

Another effect of the dry conditions is shorter than normal straw. This is not an issue for us now. As you are probably aware we chop the straw as it comes out of the back of the combine and it is ploughed back in. However it would have been a problem if we still had cows and needed straw for bedding and feeding.

Forward prices for the new crop i.e. September onwards are fluctuating wildly at the moment having risen steadily since early spring. This is primarily in response to conditions in N America, Russia, Ukraine and Europe in general rather than the UK, together with investors piling into or back out of commodities. The UK harvest will have a secondary impact on prices but that will only become apparent as harvest gets underway and yields can be more accurately estimated.

 

Elsewhere on the Farm

In the office we are starting to look at budgets for harvest 2013 as well as fine tune next year’s. Fertiliser prices in particular, followed by agrochemical, fuel and electricity are rising steeply; and seed prices will always be higher if the crop price is. Consequently Andersons, a firm of farm business consultants, have pointed out that the break-even cost of growing wheat is rising fast. Last year it was £118 per tonne, this year it is likely to be nearer £125 and next  year ??

As grain prices rise (and particularly as other low risk investments have given a very poor return recently) there is more competition for good arable land that comes on the market, pushing up prices to nearly double what they were three or four years ago. This affects the rental equivalent that has to be factored into any break even calculation.

Grass footpaths are being cut on a 4 – 6 weekly cycle.

Grain stores are being thoroughly cleaned and fumigated in preparation for  harvest, which is likely to be early this year (weather permitting of course).

Harvesting machinery and post-harvest cultivation equipment has to be fully serviced and operational. Downtime must be kept to an absolute minimum, and maximum use of the dry daylight hours made.

 

Warm off the Press

Aberdeen University is closing its agricultural faculty in September, after 116 years, the latest in a string of traditional universities to close their agricultural departments. ‘There is the possibility that we could run out of farmers and educated people within the industry’.

It is suggested that UK agriculture is facing a shortfall of 30 – 50% of the graduate recruits it needs to maintain its workforce.

Agriculture has become very sophisticated requiring a high degree of professionalism and multi-disciplinary technical knowledge.

New blood and enthusiasm are essential to meet the challenge of the UK’s future food security.

 

Interesting Statistic(s)

Last year, saffron (a spice derived from the flower stamens of the Saffron Crocus) was fetching $4,500 per kg. This year it is down to $1,500.

Last year wheat was fetching £11 per kg. This year it is up to c. £16

 

50 Years Ago: Michael Foster’s Diary Extract from 1961

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Sept 7th: Took delivery of Ferguson 35. All tractors now run on diesel

August and September in general: the diaries recount long, long hours of work tempered by weather delays and machinery breakdowns during harvest; and other frustrations as work progress is thwarted![/listitems]

 

Thought for the Month:

Last year’s Wimbledon made £31million profit

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