FarmWeb News 03/05/2012

UK negotiators are seeking changes to the CAP that would allow individual countries to reduce direct support payments by up to 20%. This would be in addition to current proposals allowing up to 10% to be diverted into rural development schemes. Farming leaders have criticised the proposals which could create a significant competitive disadvantage between countries. EU auditors have branded the whole CAP reform package “too complex to administer”.

The Welsh Government’s decision to opt for vaccination of badgers against TB is likely to cost taxpayers £3.5m net, according to the FUW. The calculation uses the Government’s own figures of the £5.7m cost of the scheme less probable savings in lower payouts for infected cattle. The cost of the abandoned badger cull scheme was calculated at zero.

The proposed badger cull in England will face a High Court challenge and to help reduce the spread of TB in the interim, DEFRA has announced tougher movement control and compensation measures to take effect from 1st July 2012.

Sales of tractors rose over 10% in the first quarter of 2012 with farmers generally going for bigger machines. The rise in sales is partly driven by the significant reduction in tax relief for machinery and plant that came into effect in April.

Arla has joined Dairy Crest and Robert Wiseman in reducing the price of milk to farmers by 2p per litre. The price is now around 26p per litre which is almost 4p below the estimated production cost. All companies blame market pressures. The cuts have been heavily criticised by farming leaders and come on the back of a survey, in March, showing increased optimism amongst producers.

Weak demand at home and the strength of sterling has led to a fall in deadweight lamb prices of around 10%. Imports are 21% lower and exports 8% higher with France and Germany the leading markets.

According to provisional DEFRA figures the total income from farming rose by 25% to £5.69bn in 2011. Output across all sectors rose 15% outpacing the 10% increase in costs. Industry analysts feel the figure is over-stated and that the final figure will be closer to 15%.

Exports of UK rapeseed have reached record levels over the last eight months. Driven by strong demand from Germany prices remain strong at £380 – £395/tonne. World supplies are likely to remain tight, with a fall of over 10% forecast in the harvests of the main South American producers.