The beautiful weather which we enjoyed in February is well and truly in the past and while grass is still plentiful in the fields it is still too soon to think in terms of an early Spring.

Hopefully the preparations for the new season have been made  - soils should have been analysed and a fertiliser plan produced which will ensure that every field can be balanced for the essential plant nutrients which will ensure a good yield of grass for cutting or grazing. The all – important lime status needs to be considered to ensure that the nutrients applied can be used efficiently.

The fertiliser plan should take account of the manures available on the farm and ensure these are directed to the fields with the lowest phosphate status. The method of application of these manures is another consideration  - with trailing shoe and dribble bar equipment producing the best response from the nutrients applied but also reducing the loss of nutrients to the atmosphere – particularly in the form of Ammonia. This “Low Emission” slurry application has been shown to increase grass growth by up to 25% while reducing emissions to air by 50 to 60% and is likely become a requirement of future policies for sustainable farming. 

Applications of chemical nitrogen are also under the spotlight and while there are no concerns about Nitrate levels in our waterways the level of ammonia in the atmosphere attributed to livestock farming, and particularly from dairy herds, is very much in the spotlight. Nitrogen losses vary significant between different types of fertiliser – with urea typically losing up to 50% of its Nitrogen as ammonia. The most commonly used nitrogen fertiliser in Northern Ireland, Calcium Ammonium Nitrate ( CAN ) is also susceptible to denitrification with significantly higher emissions of Nitrous Oxide. The current thinking points towards Urea, treated with a urease inhibitor to reduce emissions, as the most cost effective and sustainable source of chemical Nitrogen for the future. 

Applications of phosphate fertilisers which had reduced very significantly over the last twenty years  are now trending upwards again and this is reflected in increased phosphate enrichment of waterways. Research would suggest that phosphate fertiliser applied to soils at level 2 or above will produce no yield response, simply adding to the phosphate surplus in the soil and incurring an unnecessary cost to the farmer. The crop will be more likely to respond to additional nitrogen, potassium or Sulphur – refer to those soil analysis results to see where the limitations to yield actually are  - and don’t forget the lime !

The recent lack of progress in the Brexit negotiation is causing major concern for the provinces Agri-food businesses. The possibility of a withdrawal from the European Union without an agreed program of measures and controls which are necessary to allow a continuation of trade presents particular challenges for the industry in Northern Ireland. The all – island nature of our supply chains makes it equally important on both sides of the border that there is equality of standards and clear recognition of the processes involved to keep the cross border trade flows in place. 

“In the absence of a deal the UK will have to move quickly to establish new arrangements for international trade” according to Grain Trade Association President, Michael Mc Aree.

Tariff free access for low cost beef from South America could depress prices for UK farmers.
Tariff free access for low cost beef from South America could depress prices for UK farmers.

“While the UK’s membership of the World Trade Organisation (WTO) is currently based on its membership of the EU it is likely that WTO rules will be the framework for future trade and our politicians will have to decide whether standard WTO tariffs will apply or indeed they may scrap tariffs altogether. The idea of “no tariff” trade in agricultural commodities has some attractions – particularly in the feed sector where it could open access to lower cost grains but WTO rules are sector specific and the UK cannot import tariff free grains without opening the door to tariff free food. 

The impact of no tariff trade on our livestock sector is a concern – low cost meat and agri-produce could freely trade into the UK, giving consumers a welcome reduction in food costs, but at the same time creating significant competition to our native livestock production.

This would be felt most severely in Northern Ireland where half of our total food output is consumed in the UK mainland (a much higher percentage in the red meat sector).

Transport and logistics costs again have a big impact with much of the product destined for the South of England shipped through Dublin. Faced with “Just in time” supply chains and short shelf life products the extra journey time involved in delays at border crossings or in travelling through Stranraer could be prohibitive.”

Because of the continuing uncertainty the industry must plan for a no deal scenario which unfortunately means increased costs in terms of staff training to deal with new customs import and export procedures, planning for haulage issues and securing the ability for drivers to work across the islands. 

The potential for Northern Ireland Agri-Food to continue to grow and build on the remarkable success of the last 20 years or so will depend on arrangements which maintain access to an all – island marketplace and allow a free flow across the Irish Sea. 

“The resolution of the current negotiations are critical”, says Michael “the potential for serious damage to our economy in the event of no deal should not be under-estimated, but an agreement that offers us some regional flexibility could create opportunities for growth. A solution which allows us to do business as seamlessly as possible, both across the border with the Republic of Ireland and across the Irish Sea with Great Britain would be a positive outcome for the industry.“

The implications of the UK withdrawal from the EU are the subject of much speculation and the Agri-Supply trade, like most sectors of our economy are working to understand and plan for the likely outcomes.

The three  major challenges we will face post Brexit are about

A.- Maintaining trade with our nearest neighbour, Ireland. 

B. - Future agricultural policy and support payments which will reduce farm incomes. 

C.- Future trade agreements on agriculture that drive down the price of food in the UK.  

The issue of the Irish border and the ability to continue the trade across this border depends on the establishment of practical arrangements to facilitate certification of standards consistent with EU regulation and to deal with collection of taxes on goods where duty differentials exist. 

Today, we trade in feed and in animals and animal products seamlessly  in both directions across the border, businesses always chasing the highest prices that exist in either market, driving competition on the island.  Tomorrow, even under a free trade agreement we will face restrictions. Our work with DEFRA in London has been useful in understanding impacts on our business and it is clear that in both the UK and EU, restrictions on where we source cereals and cereal by-products will apply on goods trading across the border.  Businesses selling either way across the border will have to comply with “Rules of Origin” in terms of the ingredients which they can put into rations, inevitably increasing the cost on  cross border trade.  Free trade is not as free as the name might suggest, however we have thrown the challenge to DEFRA to ensure this does not happen.

Duty differentials across the border offer opportunities for profit to the unscrupulous and smuggling could well emerge as a major issue.  With the potential for the UK to charge lower duty rates on imports of agricultural products in the future, (South American beef trades at 50% of UK prices), it is easy to see how an open border will drive much more than just fuel smuggling in the years to come.  Europe will not be able to accept a soft border if cheap smuggled product is driving down local farm gate prices in the South as well as the North.  The only way to remove the incentive to smuggle is to standardise the tariffs so that imports into the UK and EU from third countries have the same “Gate Fee” regardless of the port of entry.  The two ways to deliver this we believe are a  Customs union or with more difficulty, the New Customs Partnership. 

Assuming a solution results in no duty differentials - then things get a lot easier. With no incentive for the smugglers, we  could expect lighter touch customs  policing and are left with disease and contamination regulations, (often referred to as the Sanitary and Phyto sanitary controls or SPS) to be managed.  Checks on up to 8% of cross-border movements have been suggested by some.  However the Good Friday Agreement resulted in all island policies and collaboration on disease management, with the closure of our ports to GB imports during Foot and mouth being but one example of this.   There appears be a consensus around the principle of managing disease on an all island basis between the UK and EU and if so, another hurdle to cross border trade disappears.

Whilst the challenges to trade are significant,  it is possible with goodwill on both sides of the negotiation table to avoid a hard border on the island.   A free trade agreement, with no duty differentials,  a common approach to disease and contamination management on the island and what we could be  left with is the need to effectively file our goods movements (HMRC equivalent to  delivery notes), electronically and ideally on a monthly return.   Failure to deliver on either of these two areas will frustrate trade, add bureaucracy, cost and delays and ultimately with smuggling damage our reputation internationally.   We wait to see if common sense will apply.

2018 will be a year of many challenges for the provinces Agri-food sector – and not least in the area of farm supplies according to Keith Agnew president of the Northern Ireland Grain Trade Association – the organisation which represents local feed and fertiliser distributers.

“The incoming year should see new trade arrangements and the shape of future agricultural policy for the United Kingdom evolving, as it looks to a future outside the European Union” says Keith.

Dr Keith Agnew, President of the Grain Trade Association discusses plans for 2018 with Robin Irvine, Chief Executive.
Dr Keith Agnew, President of the Grain Trade Association discusses plans for 2018 with Robin Irvine, Chief Executive.

“Our food businesses are very dependent on exports and their ability to compete in the world market for milk and meat products is critical to the local economy. But trade is a two-way flow and we must not forget that our livestock producers depend on imports of well over 2 million tonnes of feed materials. We need access to the global market for grains and proteins on favourable terms to ensure a competitive cost base for local farmers. In mainland UK the situation is significantly different with a substantial arable sector producing a high level of self- sufficiency in grains. This is an area where Northern Ireland is vulnerable and we continue to stress the importance of these inward trade flows in our meetings with DEFRA and other government departments”.

“An area of immediate concern, as we embark on the New Year, is the supply of the key vitamins essential to animal health and performance. A fire in a major manufacturing plant for Vitamins A, D and E has caused a global shortage of these nutrients. The loss of production from the BASF facility in Germany will take several months to restore and the company have declared Force Majeure on their customer contracts. Suppliers of premixes and supplements to feed businesses are working with their customers to minimize the risk of welfare issues in the most vulnerable species.

The work of the Association in protecting the food chain from contamination continues to provide an unparalleled level of assurance and the Food Fortress program has been acclaimed as world leading. We look forward to further development of the Food Fortress brand and to working with our food chain partners to add value and competitive advantage to milk and meat products from Northern Ireland.

One of the key events planned for the coming year will be the launch of an environmental training program for feed advisors and sales specialists. The environmental impact of intensive livestock farming needs to be fully understood and carefully managed to ensure the sustainability of food production.  As suppliers of farm inputs, the Associations members have an important part to play in helping farmers tackle issues such as phosphate balances and ammonia emissions. This training program is designed to equip field staff with the knowledge and practical skills to deliver key messages, relating to the use of feed and fertiliser, within sustainable livestock production systems.

The New Year starts, however, with our businesses focussed on the day to day challenges of meeting the high demand for feed ,as most livestock sectors enjoy a period of improved profitability and growth. The priority for the trade in 2018 will continue to be the production of cost effective nutritional packages for all species to support an efficient and competitive livestock sector in Northern Ireland” says Dr Agnew.

 

 The falling value of sterling is adding millions of pounds to the UK’s import bill every day. The good news for livestock farmers dependent on the global grain markets for feed supplies is that the weakness in our currency is partly offset by the fall in some key commodity prices.

Wheat prices which had stayed firm on the strength of concerns about weather in the US and a strong demand for quality grain have weakened in recent weeks. The market has been undermined by news of the Russian crop which has enjoyed favourable growing conditions – resulting in a 20% increase in yield - and is now expected to produce a massive 80 million tonnes. Domestic consumption will account for half of this tonnage but the other half will have to be offered on the world market. Realistically the country hasn’t the capacity or infra structure to physically handle exports on this scale but it is likely that around 30 million tonnes will make its way to export customers.

The Russian effect will raise the worlds traded wheat tonnage to the second highest on record – second only to last year – and has seriously depressed prices. Wheat which was trading at a 20 euro per tonne premium to maize at the end of July is now almost the same price. Both grains have lost significant value – but while wheat is unsupported the low maize price has triggered an EU import levy of 10 euro/tonne which prevents any further reductions to European consumers.

The US maize crop is progressing well with no weather issues and the weakness of the dollar against the euro making it competitive on price.

The Brazilian maize crop is now safely in store and following an aggressive campaign has been largely sold and having little effect on current trade at this stage. The monthly shipments from Brazil are running at around 5 to 6 million tonnes per month and account for 50% of the world maize trade. Other origins have suffered in competition with Brazil and have not been able to persuade their farmers to sell maize at the prices on offer.

The soya crop in the US is also enjoying favourable conditions with good yield forecasts and nothing to push up prices. Again the large South American crop is safely gathered and aggressive selling has resulted in increased tonnages for shipment over the winter months.

One material which is not in plentiful supply is Soya Hulls - a fibrous by-product of the soya crush and a popular feed ingredient in ruminant rations in Ireland and parts of the EU. Argentina is the only source of this material and as new markets have emerged in New Zealand, Saudi Arabia and North Africa the available supplies have been spread thinner so availability may be tighter this winter. This has been aggravated by the introduction of a new tax on the use of Argentinian biodiesel in the Unites States which has reduced the demand for soya oil from the crushers and reduced the production of hulls.

The soya hulls effect together with continued firmness in the market for maize by- products which are widely used as a protein source in ruminant rations mean that these feeds will see some upward price pressure in the coming weeks.

 

Feed manufacturers and suppliers across Northern Ireland are tackling the challenges of protecting our environment through an educational program focussed on controlling emissions from agriculture.

“Over 120 field staff employed in selling and providing technical support to local farmers are registered in a program of training and continual professional development” says Robin Irvine of the Northern Ireland Grain Trade Association.

Feed Advisers - Training Pilot
Feed Advisers - Training Pilot

“Members of the Feed Advisers Register (FAR) are actively engaged with farmers – with hundreds of conversations taking place every day relating to the supply and use of farm inputs. The big volume purchases such as feed and fertiliser are essential to efficient, profitable livestock production - the over supply or inefficient use of these nutrients however will not only reduce profitability but gives rise to emissions which can be harmful to the environment”. 

“We have consulted widely with industry and government agencies and have produced a comprehensive course covering the key messages relating to reducing emissions. Supply trade staff are in close daily contact with farmers and are in an ideal position to deliver these messages through the discussions around purchases of feed and fertiliser. Using the right balance of nutrients and the optimal feed rate to balance the animals requirement will ensure that production potential is fulfilled while minimising the harmful emissions. This “Precision Nutrition” approach to rationing depends on accurate  analysis of farm produced forages and will be essential to calculate protein requirement and help reduce the levels of ammonia released to the atmosphere. Similarly fertiliser applications need to be guided by regular soil analysis to establish need and avoid excessive enrichment of waterways”.

Feed Advisers at Greenmount Dairy Unit
Feed Advisers at Greenmount Dairy Unit

“We are grateful for the support of CAFRE in the delivery of the training and for hosting the courses at Greenmount College. The training program includes a tour of the college dairy unit demonstrating best practice in the feeding and winter management of dairy cows  – focussing particularly on the storage and application of farm manures”.

Training of ruminant advisers is already under way and a series of courses will run over the winter months with specialist events for pig and poultry advisers to follow. Each course will finish with a validation test leading to the award of a certificate of competence.

 

While the province is still firmly clasped in the grip of winter most farmers will be hoping for some spring like weather very soon. The early start to the winter and the difficulty of making silage in the latter part of last summer have combined to put pressure on feed stocks and farmers are looking anxiously for signs of an early spring.

An early turn-out and a good growing season to restore the depleted forage reserves would be very welcome – but cannot be guaranteed. A number of factors need to be in place to make the best of the great potential for grass growth through the spring and early summer. A soil analysis report detailing the nutrient status of each field is a good first step. Hopefully the acidity of the soils will have been corrected by a suitable application of lime and conditions will be right to ensure a good response to nutrients applied. Slurry should be applied as soon as conditions allow and this should be factored in to the calculations to determine the nutrients required from chemical fertiliser.

Applying the right levels of chemical fertiliser required to meet the crop requirement will ensure that crop yields are optimised and that money is not wasted on nutrients which are not required. The other benefit of this type of precision farming is that emissions to air and waterways are also reduced. This will be a major consideration for farming in the future as government have indicated that environmental protection will be a key element of any farm support package when the UK withdraws from the European Economic Community.

There is now considerable interest in fertilisers which have lower environmental impact  - particularly in terms of emissions of ammonia to the atmosphere. Products are now available which have been proven to be much more efficient in terms of nitrogen utilisation. Specially modified forms of urea have been developed which virtually eliminate emissions which are wasteful to farmers and damaging to the atmosphere. These enhanced products are commanding a premium over ordinary urea but the improved efficiency of nitrogen delivery more than outweighs the cost. 

Fertiliser prices are fairy stable at the minute with supply and demand reasonably balanced at both at a global and a European level. Markets for most products are not showing much movement although demand for urea and Di-ammonium Phosphate (DAP) has firmed the trade on these commodities.

Locally merchants are reporting a slow start to 2018 following significant movements to farm in Autumn of last year. There have been signs of demand building up through February with a lot of business still to be done in March.

As farmers struggle to salvage the last of their silage crops from waterlogged fields it is obvious that they face a difficult winter. For many, winter started several weeks ago with stock housed in September and scarce feed stocks are already disappearing rapidly.
Concerns about both quantity and quality of silage stocks will drive an increased requirement for forage replacer blends to stretch out the home grown feed and also for high quality rations to compensate for poor quality silage.

Belfast Harbour
Belfast Harbour

With record crops of most feed grains throughout the world the global market is awash with grain at relatively low prices but despite this the twin perils of currency and logistics could mean that Northern Ireland’s feed importers will have to compete to secure some of the key materials needed to support the industry through the coming winter.

One of the main challenges will be sourcing the supplies of digestible fibre required for ruminant feeds and particularly for the forage replacement rations. Recent years have seen a rapid growth in the trade in Soya Hulls from Argentina into Ireland – virtually replacing the 300,000 tonnes of citrus pulp which were the basis of ruminant rations some years ago. However new emerging markets for Hulls have meant that the available supplies have been spread more thinly and prices have been driven upwards by the increased demand from New Zealand, Morocco and South Africa. Feed businesses have moved to secure alternatives such as sugar beet pulp from Russia where a bumper crop has produced a large exportable surplus. But the Russians are also enjoying a record wheat harvest – and wheat trumps sugar beet in the queue for rail transport. The wheat will move first and local importers will have to wait for their October/November sugar beet tonnages – having to fill in with more expensive supplies from France and England in the short term.

As the winter progresses local traders will be hoping that the Argentinians will move to recover some of their market for Soya Hulls to Ireland and will become more competitive as the other fibres move up in price in response to the increased demand .

Grain prices continue to be led by wheat with maize, coming in at £5 - £6 cheaper in spite of the EU import levy, proving popular with feed producers and likely to be a major ingredient in rations this winter. Soya meal, given current exchange rates, is also competitively priced in terms of recent history with the result that the cereal/soya rations used in the intensive sector could be relatively stable while ruminant rations based on by-products such as hulls, sugar beet and the corn products could see more upward price pressure in the months ahead.

The volumes of all commodities on the move around the world have put some life into the demand for ocean freight and ship owners are enjoying a significant uplift in rates following a few years in the doldrums. With 90% of our feed materials arriving through the ports this will be another element keeping feed prices firm through the coming winter.

High standards of safety and manufacturing integrity are a feature of Feed businesses in Northern Ireland and the success of the industry assurance schemes in delivering these standards has been formally acknowledged by the Department of Agriculture, Environment and Rural Affairs (DAERA) with the adoption of the concept of “Earned Recognition”.

The Department is implementing revisions to the Feed Enforcement Guidance, published by the Food Standards Agency which brings Northern Ireland guidance into line with the Code of Practice operating in England and Wales. This will include a modified risk assessment scheme with a greater weighting toward voluntary membership of approved quality assurance schemes.

“This is welcome news and means feed businesses in Northern Ireland can enjoy the benefits of earned recognition,” said Keith Agnew, President of the Northern Ireland Grain Trade Association. “Feed business operators are legally responsible for compliance with feed safety legislation and DAERA have officially recognised that the trade takes these responsibilities very seriously and often exceed the legal requirements”.

Regular sampling and testing is essential to ensure the quality and safety of animal feeds.
Regular sampling and testing is essential to ensure the quality and safety of animal feeds.

John Kelley, Managing Director of AIC Services which operates the AIC assurance schemes explained that the move follows a thorough assessment of the key industry schemes - the Universal Feed Assurance Scheme (UFAS) , the Feed Materials Assurance Scheme (FEMAS) and the Trade Assurance Scheme for Combinable Crops (TASCC). “The regulators have ruled that businesses which participate and comply with these schemes are demonstrating best practice in feed production and can be viewed as lower risk” said John. “As well as reducing the burden on compliant businesses this approach allows regulators to redirect resources to areas of higher risk – including work to improve standards in businesses which do not have such a good history of compliance.”

DAERA have also confirmed their ongoing commitment to working with the Food Fortress network in Northern Ireland and have already modified their feed sampling programs to reflect the information shared though this program. The Food Fortress program is unique to Ireland having been developed originally by the Northern Ireland Grain Trade Association in partnership with the Institute of Global Food Security at Queens University. Over 80 companies involved in the import and manufacture of animal feeds contribute to a program of sampling and testing to protect the Feed and Food Chain from contamination. Test results are shared with the regulators and are factored in to the official risk assessments. This is a significant advance in terms of feed safety according to Food Fortress director, Robin Irvine. “ The industry working closely with government agencies can ensure a much more effective response to the challenges of managing risk within the food chain. “

The continued dry weather and poor growing conditions have created an unprecedented demand for feed materials to compensate for the shortage of grass for grazing livestock.

Northern Ireland farmers are  experiencing up to 20% reduction in grass yields in some areas and with the peak growth months already past, the potential for a late burst of growth to replenish forage stocks reduces as every day goes by. The situation is even worse in the South, and particularly the South West of Ireland where the highest density of dairy herds are located. This is traditionally a region where production is highly grass based – but when the grass fails producers have to look to purchased feeds to maintain production and herd health. Demand for feed in this region is higher than at any stage of the winter, with local millers overwhelmed with orders for compounds and high fibre materials to extend the available forage. 

According to a spokesman for the Northern Ireland Grain Trade Association ( NIGTA ), feed importers and distributers throughout Ireland are struggling to secure the materials needed to maintain supplies to farmers. “With our dependence on the global marketplace for feed materials there is a significant lead in time involved in securing material at the origin, transporting it to port and then   the shipping time, (up to five weeks for the palm products from Malaysia and Indonesia) before it is landed in Ireland.” Securing tonnages of these materials is complicated by the fact that most are by-products of food production or energy generation processes and the volumes available are dependent on the demand for the primary product. Soya Hulls, Citrus pulp and Palm Kernel are examples of valuable feed materials which have a limited availability and a seasonal supply pattern. 

Ireland is not the only region experiencing the extremely dry conditions with many parts of Europe and the Black Sea region also affected. This is reducing crop yields with Russia’s estimate of a 20 million tonne reduction in the wheat crop sending prices surging upwards. Barley is also trading very strongly leaving maize as the best value cereal for livestock rations. 

Further afield, lack of moisture has also impacted the soybean harvest in Argentina, the main source of soymeal and hulls for the Irish market. 

Weather is not the only factor in the current volatility in raw material markets. Trade wars appear to be inevitable  – with President Trump taking on Canada, the EU and the Chinese.  China accounts for 70% of world trade in soybeans and with the US supplying most of the 100+ million tonnes imported this spat has far reaching implications for world trade - including how feed materials are imported into Ireland

The influence of currency, and a further weakening of sterling as recent developments within the UK government regarding Brexit have left markets with more uncertainty and an expectation that this, with increased volatility, will continue until the end of the year.

 

Following many months of subdued markets with no major supply issues and only the vagaries of currency bringing any volatility to prices the new year has started with a distinctly different tone. Weather has reasserted itself as a major driver as protein markets have seen a significant bounce in response to a prolonged drought in Argentina affecting the planting season for soyabean. The lack of rain over recent months has reduced the acreage in the ground and has curbed yield expectations. Some analysists are predicting a crop of less than 50 million tonnes – well down on last year’s crop which came in at 57 million tonnes. This is significant on a global scale since Argentina accounts for  45% of the world trade in soyameal.

Weather is also having a major impact in North America with the complete freeze-up of US logistics following the record snowfall and ice bound waterways. Nearby soya supplies have become tight and this has resulted in firmer protein markets in recent weeks.

The Speculative Funds who bet on the Agricultural markets have gone into this period with the second largest short position they have ever had (largest was spring 2016) and decided to unwind some of these short bets in recent days which has pushed the market up further. This has meant that since the turn of the year soya has moved up around £20 per tonne ex store Ireland despite a stronger Sterling over the same period.

Grain markets are performing strangely with barley the most expensive cereal ahead of wheat and maize. There has been a tight EU barley supply picture due to the knock-on effects of larger Chinese barley imports, coupled with a recent 1 million tonne purchase by Saudi Arabia. The EU is now the main origin for importers since the Russian and Ukrainian supply has been depleted driving up our local barley prices. We are seeing plentiful supplies of wheat throughout mainland Europe with exports discouraged by the strength of the euro. 

The maize market continues to represent exceptional value with high stocks overhanging the market and keeping prices down below the EU import tariff threshold. Analysts do not expect to see last year’s crop numbers repeated however as the dry weather effect in South America will reduce yields significantly in Argentina and Brazil. The  US is also forecasting a reduction in corn acreage planted and the overall effect is that 2018 is likely to see a reduction in year end maize stocks. 

Supply issues in the micro-ingredients which are added to animal feeds are also conspiring to push up ration prices. Following a fire in a BASF plant in Germany which is responsible for 45% of world production of vitamin A and E supplement prices have risen by 100 – 200 %  adding £5.00 to £10.00 per tonne to finished feed prices from the start of 2018. 

 

Sustainable intensification of farming and food production can be achieved - but only through commitment from all partners and the application of new research based technologies. This was the message from Patrick Casement when he addressed a recent meeting of the NI Grain Trade Association. Patrick is a farmer and environmentalist and is Chairman of NI Environment Link and a member of the National Trust's Rural Enterprise Panel. He said that farmers need to get recognition for what has already been achieved in areas such as carbon sequestration in hedges and trees. He predicted that agricultural support in the future will recognise and reward the contribution farmers make to the environment and management of the countryside.

Robin Irvin​e​, ​G​ill Gallagher, Patrick Casement, Keith Agnew at the NIGTA September quarterly meeting. Photograph: David Scott
Robin Irvin​e​, ​G​ill Gallagher, Patrick Casement and Keith Agnew at the NIGTA September quarterly meeting. Photograph: David Scott

The challenges are highlighted in the “State of Nature” report which highlights a wildlife decline in the UK with agriculture as the main contributor. Habitat quality and quantity have been affected; water quality has suffered from phosphate and nitrate enrichment while air quality has been impacted by ammonia emissions from agriculture – mainly generated by ruminant livestock. The net result has been abandonment of much of agriculture in the uplands and further intensification in the lowland areas. The success of agriculture in the future will depend on the ability of the industry to reconcile food production with care for the environment.

A new approach is necessary – but it must be evidenced based and supported by measures such as remote monitoring of habitats in order to assess change rapidly. A sustainable land management strategy must be achieved with the carrot rather than the stick if we expect farmers to respond. Government bodies setting rules and penalising farmers will result in a “them and us” scenario whereas knowledge transfer along with financial encouragement can create a team effort which delivers the desired results for everyone.

Achieving a balance of grazing in the uplands and intensification in an environmentally friendly manner in the lowland could have huge market potential. Sustainable intensification based on evidence and scientific research has the potential to provide a win-win result for the lowland areas while farmers in the uplands can continue to graze their livestock in addition to being rewarded for the care of the environment and wildlife.

Patrick added “This might sound like a pipe dream but is achievable if the industry accepts the challenge and the responsibility of reconciling food production with care of the environment – modern agricultural systems are unsustainable if we do not act”
He warned “As farmers we must remember that we rely on the rural environment, not just for food production, but for clean water, clean air, carbon sequestration, pollination and recreation.”

Patrick concluded by complimenting the NI Grain Trade Association on their most recent training module for farm advisers which focuses specifically on reducing the environmental impact of intensive farming.

With the new harvest imminent in many of the main crop producing countries in the world growers and traders will be paying close attention to the weather forecast.

For many commodities a healthy carry-over and the expectation of a good harvest points to plentiful stocks and nothing to push up prices. Maize is a case in point with big stocks carried over from last season in the United States and now in the midst of a weather market.  Concerns about hot dry weather threatening the new crop recently caused a rally as fund buyers moved to cover a large portion of the short they had built up.  Almost as soon as their short position was covered the weather forecast turned causing future prices to decline just as quickly. In South America this year Brazil have harvested over 30 million tonnes from their first crop in January/February and will soon start harvesting their second crop of the year. This will bring their total production to around 100 million tonnes which will be a record for Brazil.  Last year after a terrible second crop the Brazilians were a net importer whereas this year they will be exporting roughly 35mmt.

Big stocks in store are weighing on the global feed commodity markets
Big stocks in store are weighing on the global feed commodity markets

With prices at low levels and supply looking strong any market volatility will most likely come from a weather event pre harvest or currency fluctuations. The all-important fund buyers don’t see much opportunity in this sort of market and have historically short positions on most feed commodities. This has left prices bumping along at a low level – just a couple of euro above the trigger point for the EU maize import levy. This means that maize prices are virtually at rock bottom since any further reduction will be offset by the levy and will be of no benefit to EU buyers.

The outlook for wheat is somewhat more bullish with US plantings at a 30 year low and the European crop threatened by drought. Markets firmed by 10 euro per tonne on weather concerns last week but gave up most of this gain fairly quickly on the forecast of rain. The effect will be to make maize more competitive against wheat and this is likely to be reflected in ration formulations in the coming months.

World protein supplies are also boosted by big soybean crops in South America with increased Brazilian exports a feature of the market. A big crop is also expected in the US and the hot, dry weather isn’t causing any major concern as the crop is still 2 to 3 months from harvest.  Again fund activity is low with record short positions the order of the day.  

The impact of these big crops is obviously bearing down on the market and Dollar prices are relatively low.  However Sterling buyers are not likely to see any benefit as the weakness of the Pound has pretty much cancelled out the price reductions in the commodities. £1 sterling would have bought over $1.50 before the Brexit vote 12 months is worth less than $1.30 today. While this has been very valuable in improving the competitiveness of our exports it also has a big impact on our buying power.