World leaders gathered in Glasgow this week for the United Nations Climate Conference, COP26. With the aim of accelerating action to limit global temperature rises to 1.5C, the Global Methane Pledge was launched as a major step towards slowing warming in the short term. Over 100 countries have now committed to cutting methane emissions by 30% by 2030.

Methane emissions arise from natural sources and human induced activities such as oil and gas production, landfill and agricultural activities. While it is a short-lived gas, which means it remains in the atmosphere for a much shorter period of time than carbon dioxide, methane’s potential to warm the atmosphere is over 80 times greater than carbon dioxide over a 20 year period. At the launch of the Global Methane Pledge, European Commission President, Ursula von der Leyen, described reducing methane emissions as a mechanism that will “immediately slow down climate change.” The initial focus will be on the fossil fuel industry, but agriculture will also be expected to step up to the mark.

“Agriculture is part of the climate change solution and is already playing its part. There are a range of initiatives ongoing throughout the local agri-food industry to tackle emissions and improve carbon sequestration,” according to Gill Gallagher of the Northern Ireland Grain Trade Association. “The feed industry is acutely aware of the challenge and has been proactive in delivering tailored environmental training to ruminant feed advisers throughout Northern Ireland, equipping them with the knowledge and tools to guide farmers on best practice in reducing greenhouse gas emissions and nutrient losses. Our focus is very much on efficiency, as a more efficient farm tends to be a more profitable farm with a lower carbon footprint. Good farm management and precision nutrition are absolutely key in this respect. Maintaining a healthy rumen environment, improving herd health and fertility, whilst maximising nutrient management all lead to productivity gains and can in turn contribute to a lower carbon footprint. We can, and are, doing these things now. To go further, investment in science and innovation is urgently needed to identify cost-effective emission reducing technologies, alongside clear market signals and realistic policy direction.”

Northern Ireland is currently grappling with the unprecedented situation of two Climate Change Bills progressing through the Northern Ireland Assembly. “We support the need for climate change legislation, but it is essential that the targets set are evidence-based having due regard for the unique circumstances of NI. The agri-food industry is the cornerstone of our economy, and we are proud to be one of the most efficient livestock producing regions in the world. It would be ludicrous to throw this away in favour of having a 2045 net zero target. We produce food for 10 million people and we do so very well - with a low carbon footprint. To decimate our industry and offshore this production to less carbon efficient regions would simply defeat global climate change objectives,” warned Gallagher.

Last week’s Balmoral Show gave farmers a welcome, and long awaited opportunity to take a day away from the farm. The weather was good and everyone across the industry enjoyed meeting,  catching up and renewing friendships. As always the current challenges facing the industry were discussed at length and every show has its big issue - the one that crops up in every conversation. This year farmer concerns about rising input costs was the recurring theme as escalating energy costs threaten to impact on every sector of the economy.

Fertiliser production across Europe is being scaled back in response to escalating gas prices.
Fertiliser production across Europe is being scaled back in response to escalating gas prices.

The dependence of UK industry on gas as the principle energy source has been brought into stark focus in recent weeks as supply concerns and a massive surge in contracted gas quotes have hit the energy market. For feed manufacturers running heavy production plant this represents yet another cost burden to add to a number of inflationary factors which are facing the trade. Freight costs on both land and sea continue to run at high levels and the global grain markets are very firm with all commodities trading significantly higher than last year.

The complex nature of our supply chains has been highlighted and the role of fertiliser manufacture in producing the carbon dioxide essential for the food processing sector has had to be secured by government intervention.

The consolidation of Europe’s fertiliser production in the last twenty years or so means that only a very small number of large scale manufactures remain and two businesses now dominate the market. The principal fertiliser manufacturers, recognising that their product could not be produced at a price which would be viable for their customers have scaled back production with Yara reducing their Ammonia production by 40% across Europe. CF industries decision to suspend production at two plants in England had implications beyond the fertiliser industry and caused an outcry throughout the food chain. The knock-on effect of that closure was that the supply of carbon dioxide – which is a by-product of fertiliser production, was also impacted. The three week window of government support to get these plants back in production has given a breathing space for the CO2 market to adjust but also adds to the stock of fertiliser available for the new season. In the absence of any longer term measures, or of any correction in gas prices the outlook for fertiliser price and availability will be a concern for local farmers. The Autumn requirement for planting winter crops has been met but next Spring will bring challenges. With Asia outbidding the European countries for the gas supplies and South America competing strongly for the limited stocks of fertiliser on the back of a strong global grain market Europe could be significantly short of fertiliser next year.  

The Private Members bill on Climate Change proposed by the Green Party is due to come before the assembly early next week. This bill sets a target of Nett Zero on carbon emissions by 2045 - and if successful will inflict a £1 billion per year income hit on the province’s livestock producers. It can also be expected to result in the loss of up to 50,000 jobs across the processing, agri-supply and ancillary businesses.

Over 100 local feed advisers have undergone environmental training hosted by CAFRE at Greenmount College.
Over 100 local feed advisers have undergone environmental training hosted by CAFRE at Greenmount College.

NIGTA are joining with local farming organisations and Agri-food leaders in calling for politicians to reject the bill when it comes before the Assembly.

“We believe this is an ill- considered and irresponsible Bill which flies in the face of the expert science from DAERA and AFBI - it is at odds with the UK Climate Change Committee advice and it will be devastating for the rural economy” says Niall O Donnell, President of NIGTA . 

“As an industry we are totally behind the efforts to reduce emissions  and our members are actively engaged on a daily basis in promoting sustainable practices throughout the food chain. With over 100 field staff professionally trained and competent to advise on the efficient use of inputs we have been leading the way as one of the first sectors to engage with government in joint initiatives which have had significant success in communicating the environmental messages to farmers.  Feeds and fertiliser manufacturers have made great strides towards protecting our water quality through reducing phosphate applied to land as fertiliser and manures. They have also funded extensive research into feed systems which are proving effective in reducing ammonia emissions to air”.

“We are committed to play our part in the mitigation of climate change and while we agree that the issue should be addressed by the assembly it is vital that the approach is informed by the best available science and with a full understanding of the social and economic impact of the proposed measures”.

“The UK Climate Change Committee guidelines recognise the much greater importance of agriculture in  Northern Ireland and that much of the food produced here is consumed in Great Britain. They have indicated that an 82% reduction in emissions in Northern Ireland will be sufficient for the UK to deliver its target of net zero by 2050. This is a challenging target and is the basis of a bill to be tabled by Minister Poots later this year. These proposals are evidence based - they have undergone an industry consultation and have been subject to an economic risk assessment. While it is inevitable that they too will lead to  some contraction across the agri-food sector as the inefficient operators are forced out of business,  it is believed that they can deliver a sustainable future for both environment and the economy”. 

 

The Northern Ireland Grain Trade Association has welcomed the proposed pilot scheme to promote the growing of protein crops in the province and are keen to encourage increased production across all the combinable crops used in feed production. 

“With the growth in demand for high quality feeds from the livestock sector our trade is becoming increasingly reliant on imports of grain and proteins” according to Robin Irvine, Chief Executive of the association.

Increasing the acreage of locally grown crops will help reduce the reliance on imported grain and proteins to sustain the provinces livestock sector.
Increasing the acreage of locally grown crops will help reduce the reliance on imported grain and proteins to sustain the provinces livestock sector.

 “Less than 10% of the 500,000 tonnes of wheat and barley we require can be sourced from local farms and an even smaller proportion of our protein requirements are homegrown. There is a ready market for increased volumes of grain as both wheat and barley are staple ingredients of most rations. The demand for beans, peas and lupins is not so well tested but subject to quality and continuity of supply there would be interest, particularly in FABA beans, as an alternative protein source in some rations. The Recent work at the Agricultural Research Institute at Hillsborough on feeding dairy cows has demonstrated that with careful formulation of diets, home grown proteins such as field beans could successfully replace soya bean meal in high performing dairy diets without any loss of production or impact on milk quality. 

Given the benefits of protein crops in providing a break in a cereal rotation, in contributing nitrogen to the soil, and in enhancing biodiversity, it is timely that this pilot should be undertaken to assess the potential and viability of increasing the acreage grown.  Europe as a whole is in protein deficit and in Ireland, given our natural strengths as a grassland region, the dependence on imports is even more marked. From a sustainability perspective the more local product we can use the better and the challenge will be to manage the limited supply which will be available. Feed manufacturers tend to purchase their raw materials on long term contracts to ensure continuity of supply and introduction of new ingredients will need to be factored in to their procurement plans well in advance. It is important therefore, that growers research their options and ensure they have a marketing plan in place before the crop goes in the ground. 

The potential to replace imports may depend to some extent on whether the area of protein crops will reduce the acreage and availability of the traditional grains. If the beans simply displace wheat and barley in the rotation the result may be counterproductive as increased grain imports will be needed to fill the gap. Hopefully, this pilot can point the way to an increase in production and an overall growth in the acreage of combinable crops in the province”.

The rapid increase in cereal prices in recent weeks signals a price warning for the local livestock sector and will inevitably be reflected in more expensive feedstuffs in the coming winter. It is expected that the impact on feed prices will be felt over the coming weeks but will be mitigated to some extent by forward purchase contracts particularly in the first half of the winter. Unfortunately the absence of any clarity around the application of tariffs after the end of the Brexit transition period has meant that many of these contracts do not extend beyond 31st December.

As always it is the international commodity markets which dictate the prices at a local level and the key driver for the current surge in feed materials has been the re-emergence of Chinese demand. Having suffered a major reduction in their pig herd due to African Swine Flu in the last couple of years, livestock numbers are now recovering rapidly - with new intensive and professionally managed pig units replacing the backyard herds and contributing to a dramatic rebound in feed demand.  Having effectively cleaned out the Brazilian soybean crop in the past year, China has switched its attention to North America and have been a relentless buyer in recent months driving record sales of combined US corn and soyabeans so far in the current crop year. This demand has contributed to a sharp tightening of the global supply and demand balance sheets while also straining US logistics.  Dockside handling capacity has been sold out in the US Gulf until March and there aren’t enough barges and rail cars available to move the volumes of feed materials to the ports.  Investment funds have responded to this activity in the market by correcting their short positions – buying up contracts for around 100 million tonnes of grain and proteins in anticipation of  continued high prices.

Modern intensive pig enterprises are replacing the back yard units as China rebuilds its pig herd
Modern intensive pig enterprises are replacing the back yard units as China rebuilds its pig herd

Europe was forecast to import 24 million tonnes of  maize to satisfy feed demand, however, with the current situation, exacerbated by a shortfall in the Ukrainian crop, importers are wondering where they will be able source this sort of volume. This has driven up  maize prices by  around £40 per tonne for local buyers and barley is now attracting more interest as the best value cereal for feed producers.  Demand rationing is becoming more and more likely – and that invariably means stronger prices.  Wheat is holding its position as the most expensive grain as the European crop has come up 20 million tonnes short of the 2019 harvest.  Sellers of feed wheat are hard to find causing our local traders to cast their net ever wider to find available supplies.

Protein supplies are also under pressure as the US reports reducing soya stocks following the sales to China. Traders are anxiously watching the growing crop in South America amid concerns about a La Nina weather event which could impact yields or delay harvest in that region. Argentina is the principal supplier of soya meal (as distinct from beans which have to be crushed to produce the meal used in animal feed) and the UK and Ireland are dependent on shipments from this region. The perilous state of the Argentinean economy has slowed down the movement of beans from the farms to the crushing plants. Recent reductions to the export taxes for meal and oil have not been enough to increase farmer selling as currency regulations and the plunging value of the peso combine to discourage sales and farmers are happier to hold their crop  on farm. The result is local Soyameal prices soaring by up to £70 per tonne in recent weeks.

The much publicised concerns about the environmental challenges facing the Agri-food industry in recent weeks have  long been recognised by the animal feed sector. “ Sustainability has been a major theme for our businesses for many years” according to Robin Irvine, Chief Executive of the Grain Trade Association. 

The remarkable success of the sector and the growth in livestock production have only been possible through the development of sophisticated nutritional packages and a focus on reducing emissions to air and water. “ Precision Nutrition is the mantra – as we aim to precisely establish the nutritional requirements for growth and production for the different ages and stages of farmed livestock and then supply exactly the nutrients required to support them. Avoiding over-supply of nutrients reduces the potential for surpluses to be excreted in the form of Ammonia, Greenhouse Gasses and Phosphates which are damaging to the environment and can also represent an unnecessary cost to the farm business.”

Precision Nutrition is the key to sustainable milk production – reducing both the environmental impact and the cost of production.
Precision Nutrition is the key to sustainable milk production – reducing both the environmental impact and the cost of production.

This approach has been supported by extensive research programs funded by the trade and carried out by the Agri Food and Biosciences Institute (AFBI). “We have been able to establish the long term effects of dietary changes on animal health and productivity and this has enabled greater efficiencies to be achieved in rationing livestock. The use of enzymes has been particularly effective in improving the utilisation of nutrients and synthetic amino acids have been used to good effect in reducing the level of protein used in diets. The management of anti-nutritional contaminants in the supply chain has greatly improved with the introduction of the Food Fortress surveillance program. This identifies substances such as mycotoxins which impact on performance and feed efficiency and advises feed businesses on effective mitigation strategies.

The ongoing genetic improvement and productivity gains from improved husbandry and management practices are also contributing to significant improvements in feed efficiency.  Measures which extend the productive life of a dairy cow - or reduce the age at slaughter for beef animals help reduce emissions from the ruminant sector while making a major contribution to farm profitability.

Local companies are leading the development of innovative feed additives and feeding practices which have the greatest potential to contribute to reductions in greenhouse gas (GHG) emissions from cattle production. Adjustments to cattle diets, such as achieving the optimum balance of concentrates to forages, as well as the use of feed additives and nutritional supplements, can reduce GHG emissions. There are several methane-reducing feed additives on the market, including products based on garlic and  citrus, clover and coriander seed, 3-Nitrooxypropanol, and seaweeds. The potential of various technologies to reduce emissions ranges from 10% to 90% reduction and is being fully evaluated and costed by the feed industry. Initial findings indicate that it is possible to significantly reduce emissions without limiting herd numbers”.

The Northern Ireland Grain Trade Association recently held their annual general meeting and are pleased to announce a number of changes to the office bearer team. 

Niall O’Donnell has been elected to lead the association as president for the coming year.

Mr O’Donnell is General Manager of United Molasses (Ireland), a position he has held since 2015,  having previously worked in the dairy industry with Aurivo and Donegal Creameries.  As a graduate of both The University of Ulster and Queens University (MBA), Niall has spent his career in a variety of roles in the Agri-Food / Feed industry.

Niall O’Donnell has been elected to lead the association as president for the coming year.
Niall O’Donnell has been elected president of NIGTA for the coming year.

Speaking after the meeting he said “ I am honoured to be entrusted with this position at such a challenging time for the supply trade. NIGTA will continue to engage fully and contribute to the issues facing we face in the Agri-food sector. We are actively working with government to establish practical working arrangements within the Northern Ireland Protocol and our association is committed to build on the success of initiatives which are effectively reducing the emissions from farmed livestock and also reducing the risk of contaminations in the food chain.

Patrick Mc Laughlin, Chief Operating Officer with Devenish Nutrition has been elected Vice President for 2021 - 2022.

Outgoing President, David Garrett welcomed the new appointments and presented a report on the Associations activities in the last year – emphasising that Brexit and Covid-19 have tended to dominate the agenda.

David Garrett reflected on an eventful and challenging term as NIGTA president at the Associations AGM.
David Garrett reflected on an eventful and challenging term as NIGTA president at the Associations AGM.

“In spite of the significant challenges and disruptions to supply we have kept up with deliveries to our farmer customers over the past year. Thankfully a trade deal was agreed between the UK and EU at the end of the year but the Northern Ireland Protocol has brought its own complications and a significant trade barrier with Great Britain. The industry has also had to cope with a highly pathogenic Avian Influenza outbreak and feed businesses and hauliers have had to be particularly vigilant in maintaining bio-security to prevent the spread of this contagious disease. The recurring themes of sustainability and the environment continue to demand our attention and the sustainability of our supply chains is becoming an increasing issue for food businesses. NIGTA is engaged with AFBI and government agencies across a range of environmental initiatives and are actively engaged in the efforts to reduce the influence of feed in Ammonia and Phosphate emissions. The executive continues to lobby government, locally and nationally, on behalf of our members and are seeking ways to have our voice heard in Brussels, given that we remain within the EU Single Market for goods but have no representation or influence there.

I would like to thank all the association’s members who have generously given of their time and expertise during the endless Brexit discussions in the past year and particularly to Lorraine Colgan who has taken over as convenor of our scientific committee. I would also like to thank all involved in our environmental training courses and in running the Food Fortress program which plays such a vital part in safeguarding our supply chains from contamination”.

The announcement on Christmas Eve that the EU and the UK had concluded a Trade Deal has brought a collective sigh of relief from the local business community on the basis that a Tariff Free – Quota Free agreement is a better outcome for the Northern Ireland economy than no deal.  

However, the Trade and Cooperation Agreement (TCA) which has been ratified by both sides will not deliver the vision of unfettered access promoted in the pre-referendum hype.  Of the promised frictionless trade based on no tariffs, no customs, and no inspections - only the removal of tariffs has been delivered and the result is a unique and unpredictable outcome for Northern Ireland.

The Northern Ireland protocol means that our concerns are not about continuing trade with the European Union - that is guaranteed and will hopefully offer unique advantages for the province’s businesses. Rather it is the ability to source goods from Great Britain, in the face of customs processes and other non-tariff barriers, which will be subject to an additional administrative burden.  

For the animal feed trade intensive lobbying had been targeted at politicians, civil servants, and the Cabinet office.  A major concern was the ability to source grain from England and Scotland post Brexit. The threat of a £90 per tonne tariff on around half a million tonnes of wheat and barley from GB would have severely impacted our livestock sector. Thankfully, the tariffs have been avoided - but declarations, checks and inspections will add significantly to the cost of trading goods by road freight with the UK mainland. Uncertainty remains around the sourcing of grains from other 3rd country regions where these had been subject to favourable EU Tariff Rate Quotas (TRQ’s) which may no longer be available to Northern Ireland importers. Goods sourced from such origins will be classed as “goods at risk”, incurring full EU duty rates on arrival, and no rebate system has yet been tabled to recover duty when these goods are consumed in NI.

Britain and the EU have finally agreed on a deal which effectively keeps Northern Ireland in the Single Market.
Britain and the EU have finally agreed on a deal which effectively keeps Northern Ireland in the Single Market.

Perhaps the biggest challenge remaining is the application of Rules of Origin (ROO) for goods traded into NI or EU which contain significant quantities of third country materials. With Northern Ireland effectively remaining within the Single Market, all goods moving GB to NI or EU will need to demonstrate that they comply with EU law from 1st January. The agreement does however aim to minimise technical and regulatory divergence and encourage the use of international standards. This is to avoid, where possible, businesses trading in the UK and the EU having to comply with two different sets of rules and regulations. Both parties will maintain separate Sanitary and Phytosanitary (SPS) regimes regulating human, plant, and animal health. This means that movements in either direction across the Irish Sea will be subject to border controls involving extensive checks. With specialist paperwork and frequent physical inspections required on products of animal origin, the agreement places a duty on both sides to ensure that any SPS border controls are “proportionate to the risks identified”. These will be regularly reviewed by a new Trade Specialised Committee on Sanitary and Phytosanitary Measures to see if further facilitations are available without compromising biosecurity. 

The deal commits to ongoing UK–EU co-operation on animal welfare, antimicrobial resistance and sustainable food systems and it includes understandings on areas such as haulage of goods, environmental improvements and state aids and subsidies while both parties have the right to impose duties if they believe any changes by the other party has led to an unfair competitive advantage. The challenge for the Northern Ireland executive will be to deliver effective policies and supports that will allow local businesses to make the best of the challenges and opportunities presented through the Trade and Co-operation Agreement and the NI Protocol.

Another month closer to 1st January and there is still no clarity as to how trade in feed materials will be regulated at the end of the Brexit transition period. This uncertainty around the potential for tariffs to be levied on imported grains and proteins in the New Year makes it impossible to forecast feed prices for this winter. There is already significant volatility in the market with local traders facing stiff competition and stronger prices in recent weeks.  The effect of the falling value of sterling, strong Chinese buying and fund buyers active in the market has pushed up prices of all feed materials. Maize has gained £15 to £20 per tonne in a month as the Chinese have stepped in to replace around 10 million tonnes of home production lost in the recent typhoons while soya and other proteins have also made significant gains.

Boris in Brussels
Boris in Brussels

For grain traders, speculation based on known parameters and previous history is very much the name of the game. In the current landscape however, there are no signposts to guide decisions or anything to help businesses in the supply chain understand what the future holds.

Over two million tonnes of imported feed materials will be required to sustain the province’s livestock sector over the next 12 months. We are reliant on global sourcing from regions such as South America, Ukraine, Canada and the USA. Our importers sign purchase contracts many months in advance, sea freight is secured and shipping programs are organised to deliver a regular weekly supply of material to the ports at Belfast, Warrenpoint and Lisahally.

This international trade in these materials is based on agreements, tariffs and quotas negotiated between countries - with individual trading companies bidding for an allocation to purchase from the quota tonnage. Tariff Rate Quotas (TRQ’s) apply to some materials and origins where agreement is made to trade a specific tonnage at a tariff significantly below the standard World Trade Organisation (WTO) terms. The EU TRQ’s play a big part in the trade in a number of key commodities and the split of the tonnage quota between EU and UK has already been agreed. Question marks remain however, around where Northern Ireland will sit in these agreements. Despite remaining within the EU for the purposes of trade, there is a real danger that  Northern Irelands’ requirement for access to EU TRQs may be understated due to the Rotterdam effect. This arises from the fact that much of the material landed in Northern Ireland is officially received into the EU through Rotterdam or other European ports and Northern Ireland is not recorded as the end user.  This has the potential to cause a distortion of trade on the island by allowing  Republic of Ireland businesses to import materials on more favourable terms than the North.

Much remains to be resolved in the coming weeks - will there be an EU/UK deal where the Northern Ireland Protocol pathway is followed ?  - or will it be an amended version as per the Internal Market Bill if no deal is struck ?. While the deal is by far the better outcome  neither will be totally  frictionless and both will add significant cost to businesses in the food and feed chain.

A perfect storm of rising prices and supply problems are facing farmers and businesses in Northern Ireland. The combination of COVID 19 disruption, additional costs relating to compliance with the Northern Ireland Protocol and the relentless demand from China across a wide range of commodities is driving up prices in virtually every sector of the economy.

Commodities affected include steel, timber, lubrication oil and a wide range of everyday consumables. A global shortage of electrical circuits is also impacting on the manufacture  of plant and equipment requiring complex electronic controls.

Sea freight prices have soared and supply chains have been disrupted as shipping schedules have suffered delays due to events such as the Suez Canal blockage.
Sea freight prices have soared and supply chains have been disrupted as shipping schedules have suffered delays due to events such as the Suez Canal blockage.

The vulnerability of global supply chains is becoming increasingly evident as production capacity in many key areas has become concentrated in a few very large scale businesses.

Transport and logistics have been a key factor with disruption to shipping due to low water in Argentina and the recent blockage in the Suez Canal causing shipping schedules to slip out of position and cause major delays in movements of all materials. Sea freight costs have almost doubled as shippers compete to secure available vessels with container freight capacity proving particularly difficult to secure.

Feed material markets are being driven by the more normal variables such as weather events - specifically drought in South America which is causing concerns about the Safrinha maize crop in Brazil. This will reduce exports from these regions, creating an increased demand for the US crop and with Chinese purchasing from the US projected to keep increasing, continued support for prices is expected. The Chinese have emerged as the worlds’ big buyers of maize and reports that their native wheat crop is not coming up to expectations fuels concerns that this will be a continuing trend. The previously strong global maize stocks which had kept a lid on world grain prices in recent years are definitely in the past and the surge in the maize price was inevitable in the face of insatiable Chinese demand. The beneficial maize discount of recent years is greatly reduced and it is now trading at similar prices to wheat.

The re-emergence of global ethanol demand also serves to keep a firm tone to grain markets as the feed v fuel debate makes a return. The UK surplus of barley which has weighed on the local market has been largely used up and prices have also recovered as stocks have reduced.

Weather stories and harvest speculation will continue to drive volatility with recent easing of futures prices in some markets unlikely to indicate any major change of direction. The fundamental concerns about supply in the face of strong demand will set the tone of global markets for the foreseeable future.

A number of global drivers are combining to push up prices of key farm inputs according to the local supply trade body.

Weather in South America is one of the main concerns at the minute according to Grain Trade Association CEO, Robin Irvine. The Brazilian soya harvest has been seriously delayed by heavy rainfall and this has also impacted on the planting of the second (Safrinha) maize crop. By this stage 2/3rds of the soya crop should be on its way to the ports but currently only 1/3 has been harvested. This has caused a serious delay in the movement of material to the quayside and an ever lengthening queue of vessels waiting offshore for its arrival. The cost of sea freight has soared as dozens of large panamax vessels, with capacity of up to 80,000 tonnes each, remain at anchor off the Brazilian coastline. Elsewhere, the US are reporting that Soya stocks are tighter than they have been for a decade and prices have been forced up in a battle for acres as maize and soya compete to be the most profitable crop for American farmers.

The delayed soya harvest in Brazil is putting pressure on global protein supplies.
The delayed soya harvest in Brazil is putting pressure on global protein supplies.

The relentless Chinese demand is also driving up grain prices as China has moved from a minor player in the maize market to replace the EU as the world’s biggest importer. This has reduced the tonnage of maize available for Europe and along with the shortfall of 15 million tonnes in the EU wheat harvest it is hard to see how the European grain demand can be met. Russia, a major wheat exporter is not an active seller amid continued uncertainty around export taxes as the government seek to limit domestic food price increases. Barley may fill some of the gap but there is no doubt that Europe needs a big harvest this year to rebuild stocks. 

Rising grain prices are inevitably followed by increased demand for fertiliser as growers look to expand the area sown and also to maximise yields per acre. Nitrogen is the principal crop nutrient with urea as the most widely traded form of the chemical at a global level. A substantial portion of the world urea market is transacted through large scale government contracts which have the potential to take huge tonnages of material off the market and this year they have had the effect of creating a very tight supply situation and have restricted the tonnage available to local traders. This is pushing up prices of all nitrogen fertilisers and may cause supply issues throughout the season.

Increasing Phosphate prices are also fuelled by the strong grain markets with both Di-ammonium Phosphate (DAP) and Triple Super Phosphate (TSP) reflecting increased demand from the cereal sector. Potash remains good value for money and should not be overlooked – particularly on grass destined for multiple silage crops.

The challenges of reducing the impact of intensive agriculture on the environment are being addressed at all sectors of the Agri-food chain. The animal feed trade in particular has taken a leading role in promoting resource efficiency and precision nutrition as a means of managing emissions to both air and water.

Last week’s webinar hosted by the Agri-food & Biosciences Institute (AFBI) and supported by John Thompsons and Devenish Nutrition has challenged some of the established practices in pig nutrition. A number of presentations outlined the results from a research programme delivered under the auspices of the Pig Research Consortium and demonstrated the value of collaboration between business and academia in producing highly relevant, farm-based research which produces a real benefit to the industry.

The webinar reported on the programme of work focussing particularly on dietary management as a means of reducing ammonia emissions to the atmosphere. The precise rationing of protein in the diet is the key to minimising the level of unutilised protein, which passes through the animal and is excreted as nitrogen. This nitrogen can be volatilised as ammonia and released to the atmosphere in the storage, handling and spreading of slurry and has been linked to damage to susceptible species of plant life in environmentally sensitive areas.

Different levels of dietary protein have been trialled for pigs at different ages and comparisons of the nutritional requirements of gilts versus boars have been made. This has enabled precisely formulated feed programmes to be developed –  using essential amino acids to optimise the performance of the pig while minimising the protein input. This is a delicate balancing act since a non-balanced protein reduction, which slows down the growth rate of the pig means more days to slaughter and an increase in the overall ammonia produced.

The results of the programme are pointing to a number of important messages, which can allow more efficient and cost-effective feed regimes for the provinces pig farmers – while reducing the environmental impact of the industry.

“The network of FAR registered feed advisers will have a key role to play in the communication of these messages at farm level”, says Robin Irvine of NIGTA who have developed and deliver the Feed Advisers Register training programme in Northern Ireland in conjunction with CAFRE and AFBI. “The precise application of the research recommendations will need to be tailored to meet the circumstances of each individual farm and the new training module for pig advisers will incorporate the latest guidance on protein rationing for finishing pigs”.

“With over one hundred advisers trained and accredited to the ruminant module, we are now looking forward to delivery of the course for pig specialists in the coming weeks”

Local feed businesses will face major challenges in the absence of a trade deal between the EU and the UK by the end of the transition period on the 31st December.

With Northern Ireland still operating to EU rules after the UK has exited, import checks on many goods arriving from Great Britain will be inevitable. Depending on how the necessary controls are implemented, the trade could face substantially increased costs to maintain compliance. For materials containing products of animal origin such as milk powders, fishmeal or other animal derived ingredients there will also be a necessity for veterinary certificates, and another cost burden.

Grain discharging at Belfast Harbour.

According to Robin Irvine of the Northern Ireland Grain Trade Association, “Northern Irelands businesses need guidance to manage the new thinking around the range of complex issues which will affect the flow of feed materials. The Northern Ireland Protocol indicates that we must operate by European rules, yet the UK Command paper is clear - NI will be guided by UK. In the absence of an EU office in Northern Ireland what provision will there be for NI business to avail of a technical reference point, to help them understand EU rules and enable them to manage trade challenges ?”

Local feed traders are calling for a pragmatic approach to enforcement - “We need simplified systems to deal with duty rebates and regulatory checks – even then we will be looking at massively increased administration, IT and training costs. The industry will need help from government if this cost is not to be reflected in increased feed prices, which will damage the competitiveness of the livestock sector. 

Tariffs of up to £60Million could be payable on imported feed materials if they are deemed to be at risk of entering the EU (Republic of Ireland). These tariffs should be refundable at the point of consumption if it can be proved that they remain in Northern Ireland. Given that the point of consumption is on Northern Irelands 25,000 livestock farms this could be a massive administrative burden. It could also represent a major financial burden if businesses have to fund these tariffs and await a rebate recovery from HMRC - estimated to take at least 3 months, allowing for account stock periods, invoicing of forward sales through to making a claim. The working capital burden for the sector would be in the region of £15 million at any given time”.

While the Northern Ireland Protocol offers an opportunity for the province to enjoy trade within both Europe and Great Britain with unfettered export access to both regions – it will be the practical application of the protocol, which determines if true unfettered access can be achieved, or if administrative, and cost barriers prevent full rollout as the UK Government intended. 

Failure to reach an agreement on trade with the EU will create barriers to the movement of goods into Northern Ireland. As the UK diverges from European Union standards and tariffs, goods from Great Britain will treated as imports to the EU when they enter Northern Ireland – customs clearance and SPS compliance will apply when they arrive at our ports.

Many of the materials currently imported benefit from special trade arrangements, which allow favourable access – these include the Canadian Free Trade Agreement, the Ukrainian Association Agreement and other agreements with Tariff Relief Quota available through the European Union. The future of these arrangements remains to be clarified – as does the position of Northern Ireland in respect of trade deals and tariff schedules, which will be introduced by the UK.” 

According to the NIGTA spokesman, “We need clarity on the detailed implementation of the protocol and are asking for government to support the trade in four key areas”.

  • Implement a simplified system of duty rebates in event of no deal.
  • Allow trade engagement with the Specialised Committee’s Expert Working Group on “at risk goods”. 
  • Ensure access to EU Quota for Ukraine/Russian goods.
  • Provide support to meet increased finance, IT and compliance costs.