Feed Market Update

Feed markets have been through a turbulent 6 months, and whilst we have seen markets subside from record highs, there is still cause for concern as we progress through this year’s harvest.

Cereal markets

Looking at wheat and other energies, prices topped out at over £360/T for feed wheat in May this year, with prices this week around £90/T from the highs at £270. Some of these price reductions occurred following the deal between the Ukraine and Russia to allow exports of grain from Ukrainian ports. The trade estimates between 12 and 16 ships have now left Ukraine with over 20million Tonnes of grain left in Ukraine waiting to be exported.

Outside of Ukraine, hot and dry weather across Europe and the US is helping support energy crop pricing. Whilst some of the hot weather will not affect crops to be harvested this year, a lack of moisture could delay autumn drilling and keep prices elevated. As you can see from the below graph from the AHDB, grain markets are down from their highs, but have remained rather stagnant through July and August whilst the market assesses harvest data.

Protein and oil markets In protein markets, prices are sensitive to news. With rapeseed markets reacting to crude oil price changes and soybeans reacting more to weather reports from the US in particular. Longer term, large South American Soybean crops will likely cause a reduction in soya prices, and it is anticipated that rapeseed will follow those trends providing there are no hinderances to growing and harvest across Canada particularly. If you are yet to cover protein for the full winter period, then watching these markets would be advisable as there could be a buying opportunity during the lead-up to the South American harvests. Finally, positive news in the palm oil market, following Indonesia’s decision to remove their palm oil export ban in May, the government have now decided to increase the quantity of exports from the country. Since the 1st of June, palm oil prices are down over 30% and this is translating to the protected fat market (Megalac and similar), where we have seen prices decrease by £300-400/T already. More widely, recessionary fears are also being priced into markets, with exchange rates remaining a factor for UK importers of grain, particularly from America should the pound become weaker. This will remain another watchpoint as we gather UK and European harvest data and the market awaits the outlook from the US world agricultural supply estimates. For advice in understanding markets or for help in booking tonnages for the winter, please don’t hesitate to get in touch!

Charlie Davies 07904 601104 charlie@kellyfarmconsulting.com

Laura Cureton 07399 117257 laura@kellyfarmconsulting.com

Sam Kelly 07777 696080 sam@kellyfarmconsulting.com Office 01454 614624

Check yor forage stocks!

Many of our clients have had a good 1st & 2nd cut, and the quality is generally good. The recent hot weather has sent grass backwards, and the next cut will be a lot lighter than expected. It is important that we still get the cut off before we have any decent amount of rain so that we have some good regrowth for the next cut - if we leave it then we end up with a severe lack of overall forage on most farms. Given this situation, it is important to assess overall forage stocks now and look at options to top up forage stocks if needed. That could be taking some wholecrop (getting plenty late enough for this but could still be ok on Spring crops), or perhaps buying some standing grass or maize as a top up. There have been some good crops of hay made in excellent conditions over the past couple of weeks, so this could be used to plug a gap for early dry cows and youngstock over the winter. Maize crops are certainly variable this year, a good dose of rain would help! Some of these crops have tassled very early so we wont be able to expect bumper yields on these crops. Moist Feeds are jumping in price along with everything else, I understand Brewers Grains are not available now and they could sell what they have 10 times over. Other alternatives like Trafford Gold or AmyPlus are available, but the price tag doesn’t make them very attractive. Whilst these are always an option for topping up forage stocks, its going to be much more cost effective to take forage instead if we can. If you are at all concerned about forage stocks, please contact us as soon as possible to discuss the options in more detail.

Sam Kelly 07777 696080 sam@kellyfarmconsulting.com

Charlie Davies 07904 601104 charlie@kellyfarmconsulting.com

Laura Cureton 07399 117257 laura@kellyfarmconsulting.com

Office 01454 614624

Sustainable farming incentive – open for business!

Today, the Sustainable Farming Incentive (SFI) scheme has opened for applications. 

The SFI is the first of the Environmental Land Management (ELM’s) schemes to be released. In the first year of the SFI, two soil standards will be introduced with farmers being paid to manage soils in ways that enhance the environment. DEFRA have also released a moorland standard, whereby farmers will be paid to assess the condition of the moorland, with further funding opportunities being promised in the future. We anticipate that the full roll out of all options and standards for SFI will available by 2025.

The application process is set to be streamlined as well, with farmers or advisers invited to apply online. With more automatic checks, it is hoped that applications will be processed and approved much quicker than is the case with other schemes. SFI agreements will last for 3 years, and payments will be made quarterly to farmers.

Please see the below table summarising the payment rates for standards available in 2022:

The RPA have confirmed that there are two avenues of applying for SFI within the initial weeks of the rollout. Those claiming BPS only can apply directly using the Rural Payments service online. However, those in BPS and with an existing stewardship scheme in place, are asked to contact the RPA who will provide further support and guidance. If this applies to you, you can either email the RPA at ruralpayments@defra.gov.uk (using ‘Apply early for SFI’ as the email subject and referencing your SBI number) or call the RPA helpline on 03000 200 301.

SFI guidance states that farmers should be able to run SFI and Mid-Tier on the same land parcels, provided that those options are not double funding.

For more information on whether your farm is eligible for this, or to discuss how SFI could work for your farm, please get in touch with us!