BUSINESS UPDATE 2014 Edition 4. reliability in every field

Transcription

1 BUSINESS UPDATE 2014 Edition 4 reliability in every field

2 Grain Marketing Key Contact: Robert Kilby Mobile: Description 2014 Crop (Nov) This Month /t 2014 Crop (Nov) 2 Months Ago /t Milling Wheat Crop (May) This Month ( /t) Feed Wheat OSR Barley (Feed) Field Beans Unfortunately since the last update nearly all my predictions have been proved correct and have been compounded further. This has caused significant price falls with wheat falling 25% and all crops suffering severe price losses. This is very serious for the UK arable sector in the short term with potential longer term implications. We have seen some small rises in the past two weeks on the back /10/ /11/2013 of a slightly weaker pound and glimmers of weather issues abroad but I would see this as a selling opportunity rather than a change in trend. With values of wheat at around the 110 spot and 120 for November 2015, the majority of farmers will have wheat in store or in the ground that will be losing money. We estimate our average production costs for 2015 post rent and finance will be in the mid 120 s so we need to make plans to further reduce costs, add value and maximise yield; not an easy task and a difficult equation to balance. We have been here before so we have to prepare for the worst and hope for the best. We have sold 20% of the 2015 crop at 125 but don t envisage any further sales while they are at a loss making value. We are currently around 80% sold on our 2014 crop on most of our farms at an average in the mid 130 s. With a huge maize crop expected in the USA, a very big if not the biggest Northern Hemisphere crop in store and plenty of selling to do, I expect the 2014 crop to remain in the doldrums unless something unexpected turns up. The 2015 crop has a long way to go and plenty can happen in that time but as I have said we need to prepare for the worst. 2 UK Ex Farm Prices /t 03/12/ /01/ /02/ /03/ /04/ /05/ /06/ /07/ /08/ /09/2014 Feed Wheat Milling Wheat Feed Barley Source: HGCA

3 Agronomy Key Contact: James Mayes Mobile: Description Pack Size (L) 2014 Price ( ) 2013 Price ( ) Derrex 20kg 20kg Carakol 15kg Trooper 10L Herold (formerly Firebird) 3L Auxilliary 10L Proline 5L Afrisect 5L For most, the harvest 2014 period will be remembered for its early start and relatively trouble free progress up to the latter half of August, when significant rain arrived to hamper harvest and encourage slugs into newly sown oilseed rape crops. To date we have reportedly experienced our driest September since records begun in Figures for the month of September suggest that the UK as a whole received 19.4 mm of rain. This is just 20% of the normal amount of rainfall expected for the month. At the time of writing some long anticipated rainfall has arrived with high winds signalling the end of a perfect Indian summer and allowing autumn to finally arrive. This dry spell has enabled many to delay the sowing of winter cereals to allow further flushes of grassweeds to develop in stale seedbeds but it has also meant that many oilseed rape crops have struggled to develop at the pace that many would have liked, with significant pressure being evident from both slugs and Cabbage Stem Flea Beetle (CSFB). Oilseed Rape There has been much discussion and debate since it was announced that there would be a two year ban on the use of neonicotinoid seed dressings on oilseed rape crops for the harvest years of 2015 and Many have since attempted to establish crops without these vitally important tools with levels of varying success. Although widely acknowledged as a localised problem it is easy to appreciate that all growers will have been affected by this pest in one way or another. There have been national reports of numerous applications of pyrethroid sprays being applied to crops every few days again with varying levels of success. Indeed crops have been lost to CSFB and difficult decisions have had to be made with regards to redrilling failed crops in light of the falling value of oilseed rape. 3

4 Agronomy Product Insyst (Certis) Active Ingredient Primary use Conditions of Use Acetamiprid Pollen Beetle in spring One application in a 120 day establishment period up to the end of January against CSFB Biscaya (Bayer) Thiacloprid Extension of use for control of Peach Potato Aphid during autumn and may provide some control of CSFB during establishment period. Spring infestation of Pollen Beetle Two applications in a crop of winter OSR. One autumn against vector carrying aphids, and secondly during spring against Pollen Beetle A cooler wetter developing weather picture could slow the speed at which CSFB are currently travelling through crops. This has also been aided by the recent announcement from DEFRA that two neonicotinoid sprays have been approved for use in the growing of oilseed rape. With the emergence of oilseed rape crops coinciding with regular showers in late August, production of Phoma spores will have undoubtedly taken place despite the dry conditions experienced in September. Dependent on varieties sown and geographical location we could start to see Phoma leaf spotting appearing in oilseed rape crops within the next 2 to 3 weeks. Smaller later drilled crops will be at more risk from Phoma as the distance for the disease to travel from the infected leaves down the petiole to the stem is shorter. As has been widely publicised for a number of years now, Light Leaf Spot pressure appears to be increasing year on year and is no longer a disease associated with only the Northern regions of the UK. As with Phoma, Light Leaf Spot spores also originate from stubbles and crop debris with spores being released in the autumn. Product Active Ingredient Comments Plover/ Difcor 250 Difenconazole Cost effective option against Phoma, weaker on LLS Tebucur 250/ Folicur Tebuconazole Cost effective for Phoma with significant growth regulatory characteristics. Refinzar Penthiopyrad and Picoxystrobin New SDHI addition with cost premium. Root development with no growth regulatory characteristics. Proline 275 Prothioconazole Strong LLS activity With the removal of Fluzilazole products such as Capitan there is now a more limited market in terms of Phoma products available to the grower. There are options based around the active ingredients Prothioconazole, Difenconazole, Tebuconazole, Penthiopyrad and Picoxystrobin. 4

5 Agronomy Threshold levels for applications against Phoma should be started once 10% of leaves have become infected. Phoma risk can be assessed with the use of the on-line forecasting tool: Wheat Collected Blackgrass seed shed this summer has been assessed as being moderate in its dormancy characteristics. This means that with suitable growing conditions there is a good chance that shed seed will germinate providing opportunities for control through factors such as: Applying Glyphosate to germinated and emerged plants in crop aftermaths Applying Glyphosate to stale seedbeds worked to a depth of 5cm Delaying drilling on the worst affected fields and using Glyphosate before any drilling takes place Increasing of seed rates can also be used as a tool to aid competition within the crop to suppress the development of Blackgrass, this along with the better production of seedbeds will enable any planned herbicide programmes to be better utilised and improve the efficacy of products used. The use of a robust pre-emergence herbicide containing Flufenacet + Pendimethalin (Trooper/ Crystal) with a residual component such as Herold (Diflufenican and Flufenacet) will provide the backbone of a well stacked programme. This can be sequenced with the pre emergence use of Triallate (Avadex) to boost activity. The use of autumn applied Atlantis/Horus (iodosulfuron- methyl- sodium + mesosulfuron- methyl) should be partnered with another herbicide to boost activity. A contact product such as Auxiallary (clodinafop- propargyl + prosulfocarb) can be used to good effect. Consider the following important aspects in determining the optimum post-emergence timing: Apply herbicides in conditions most suited to their activity Always apply to small Blackgrass plants which are easier to control. This is especially the case where enhanced metabolism resistance is, or maybe, present Prolonged mild autumn conditions will continue to aid aphid flights. Consideration should be given to the risk of BYDV infection on crops where emergence has passed four weeks and the protection offered by seed treatments such as Redigo Deter (clothianidin + prothioconazole) could be starting to decline. Applications of cypermethrin (Afrisect) are worthwhile where aphids are active with repeat applications possibly being required every days if activity persists. Metaldehyde Stewardship Slug pressure has been high again this season and has required the use of appropriate control measures. The use of metaldehyde based products is still the most popular and cost effective method of control. 5

6 Agronomy The Metaldehyde Stewardship Group has set out the following guidelines to minimise the risk of metaldehyde entering water courses. Use minimum active ingredient per hectare to avoid drainage and run-off losses Maximum application rate 210g metaldehyde ai/ha* For additional protection of water, suppliers/basis advisors may recommend rates reduced to 160g ai/ha or less* Maximum total dose from 1 st August to 31 st December: 210g metaldehyde ai/ha* For additional protection of water, suppliers/basis advisors may recommend rates reduced to 160g ai/ha or less* Maximum total dose rate: 700g metaldehyde ai/ha/calendar year* No pellets to be applied within 6 metres of a water course Do not apply when heavy rain is forecast If drains are flowing do not apply metaldehyde based slug pellets *from any combination of metaldehyde products, 700g is also the statutory limit. For more information visit: Alternatives to using metaldehyde based products include Pherric Phosphate (Derrex) and Methiocarb (Draza Forte). These pellets are able to better withstand rainfall in the field and are effective and attractant to slugs for a longer period of time. There is also no known water contamination issues associated with Pherric Phosphate. With a price premium over the metaldehyde products there has been an increase in use over the last two years. Methiocarb (Draza Forte) based products are now into the process of being withdrawn from sale following their revocation by the EU. A deadline use up date of August 2015 is in place to have all stocks used up on farm. 6

7 Product Services Key Contact: Richard Peck Mobile: Description November 2014 /t November 2013 /t UK AN Potassium - MOP Phosphate - TSP Imported AN Urea Fertiliser Following on from the June report, the UK manufacturers have done exactly as they suggested and continued to put up the AN price, despite urea and imported AN remaining cheap by comparison. On a kg for kg cost basis this puts UK AN 18p/kg above the cost of urea, with wheat now trading around 100/ tonne; this is making UK AN uncompetitive. In comparison urea has had an interesting few months. As predicted in June there was very little down side in the market price, with the odd load trading in the region and the view was then, that it would only go up. And it did with a very rapid rise to making the June price look attractive. This rise wasn t expected to be so big; equally, the market thought it had moved to a false position. The question now being asked is how low it will fall. Currently it has dropped to 280; it seems to be resisting any dramatic falls and a price of 265 looks a long way off currently maybe a price of 270 looks like a good bet Fer$liser Prices- Eastern England /t Oct- 13 Nov- 13 Dec- 13 Jan- 14 Feb Mar- 14 Apr- 14 May- 14 Jun- 14 Jul- 14 Aug- 14 Sep- 14 Uk AN Potassium - MOP Phosphate- TSP Imported AN Urea Source: Trade

8 Product Services There may be a buying opportunity in this last quarter of the year, but again, as in June I think more potential upside than down. This is possibly not the year to wait for a sudden drop in price post-christmas. Equally the logistics of shipping urea in and then moving it before the season starts are beginning to look tight. Seed When many of you read this, most wheat will be in the ground, maybe some 2 nd wheat and wheat after maize and beet still be to be drilled. The drop in cereal prices has made many look to varieties with inherent disease resistance, and certainly moving away from the higher yielding but dirty varieties, such as Santiago. Home saving has always paid dividends; now as margins are squeezed it becomes even more worthwhile. Hopefully all of you who required Deter dressed seed placed orders early and were not disappointed. Sprays As the seasons roll on, the problems are just the same. Already there are warnings that many key active ingredients are possibly going to run short. This is always an emotive subject; the industry has to react or face the consequences of not having the products that are essential. In times of tight supply, the relationship with supplier becomes ever more important. Make sure you have your name on avadex, any product containing flufenacet and DFF. It s not too early to start to plan your fungicide strategy; a planned approach with a few options in mind would not be a bad idea. Again with cereal prices being so low, another look at older chemistry has to be worthwhile. Keeping crops clean will be essential - who would like to bet that CTL will go up in price as it offers such value for money? Triazoles efficacy is reducing but still they remain essential to our programmes, just be aware they are not as effective as they were. Look hard at the cost of the SDHI, can we afford two? Or should we aim for just one at T2 and rely on older chemistry keeping the crops clean to T2? There is not a right answer, but a great topic to debate and discuss. Money Status Disclaimer: Whilst every care is taken in compiling the content of the Business Update, Sentry are not responsible for providing this as professional advice and any actions arising from this report. Bank of England Base Rate 0.5% Current Inflation (CPI) 1.2% One Euro =

9 Land Agency Key Contact: Jamie Seaman Mobile: KEY DATES Key Dates Description 1 st October Start of closed period for applying organic manure* to arable land on soils which are not shallow or sandy 15 th October Start of closed period for applying organic manure* to grassland on soils which are not shallow or sandy 31 st October Actual abstraction return forms available to holders of summer abstraction licenses 30 th November Holders of two part tariff agreement for their water abstraction licence can except their second part charge from this date 1 st December SPS payment window opens *with a high readily available nitrogen content Single Payment Scheme (SPS) Update - the deadline looms As you are aware the SPS as we know it will cease to exist at the end of this year. It is worth getting a few things sorted now whilst you still can. Entitlement - if you have spare entitlement I would suggest selling this ASAP. The deadline for transfer is 21 st October and although the price has dropped significantly it is still trading at around 140/ha. The same applies in reverse if you are short - look to purchase entitlement. The market is flooded and the cost will be more than recouped in your first year s claim. If you have less than 5ha of land - again an entitlement offload may be your best option as next year no claimant under 5ha has a right to claim. Basically move it or lose it. Exchange rate - the rate as at 30 th September 2014 set for calculating the 2014 Single Payment was fixed at its lowest since This year 1 Euro will yield ; this in turn could result in a reduction of around 7% on our SPS cheques, which coupled with plummeting commodity prices is an unwelcome result. Our best estimate of the net value of your SPS income as we don t yet know the 2014 entitlement Euro value or what financial discipline will be applied (2.545% in 2013) is approximately 202/ha or 81.75/acre scheme 1 = scheme 1 = scheme 1 = scheme 1 = scheme 1 = scheme 1 = scheme 1 = Warning from the Rural Payments Agency - The RPA has said every year some claimants do not update them of changes to their bank details, causing delays in payments being made. Farmers are urged to ensure they have provided the Agency with their current bank details. 9