Sugar reforms are not so sweet (From Gazette & Herald)

Sugar reforms are not so sweet

For all of our many sugar beet growers in the region together with other businesses associated within the industry, publication of the European Commission's proposed reforms will have made difficult reading.

The proposals that were unveiled last week and agreed by all 25 commissioners will begin in 2006/2007 and run until 2014/2015. With ever-mounting pressure on further CAP reforms there seems very little chance of a mid-term review to the sugar beet sector.

Briefly, the proposals are as follows:-

- The EU support price to be cut by 38 per cent with farmers compensated 60 per cent of this cut through a new de-coupled payment.

- Intervention to be scrapped in favour of new private storage safety net.

- Quotas to remain but there will be a buy out scheme over four years by a levy on existing quota holders.

Initial thoughts are that the buy out scheme will start at £480 per tonne, falling to £270 per tonne.

The reaction from the grower has clearly been one of concern as the projected price of £17 per tonne will result in negligible margins and therefore make little sense in growing the crop.

Entry Level Scheme

With the ongoing saga of farmers wishing to enter into the Entry Level Scheme, and many falling at the first hurdle with regards to incorrect maps and continuous delays with the Rural Land Register correcting or registering land, the Rural Development Service (RDS) has now changed the time limits.

The Entry Level Scheme is to be rolled out on monthly intervals to help minimise the problems that are being encountered. This means that there is no specific deadline date for application forms and the RDS will aim to process the applications as soon as possible and within a target of less than three months. Payment for the Scheme will then start six months after the start date. Applicants who have made valid applications by July 1 or in certain circumstances July 15 will receive a conditional agreement, with the start date of August 1.

According to RDS, out of the 24,000 application packs sent out only 2,500 have been received - none of which I understand have been processed!

From the grain correspondent:

Wheat

Old wheat crop prices have slipped as new French wheat will soon be available. New crop prices, however, still remain supported by the hot weather in the UK and on the continent by the lack of the farmer selling. While it is true to say that the weather has been warm, it's far from certain that any negative impact will be seen on yields. Indeed, if the expected rain arrives over the next few days then the recent warm weather will have done more good than harm.

Oil Seed Rape

US soybean futures markets have surged over the past two weeks on hot dry conditions across the eastern soyabelt (over the past month the Nov 05 soybean position in Chicago has risen by over £30/tonne). This is very early for a US weather market to develop and suggests that we can expect extreme price volatility over the next three months leading up to their harvest.

EU oilseed rape prices have firmed on the back of Chicago, however the impact on the UK market has been tempered by the strength of Sterling vs Euro (Sterling has appreciated by 5 Euro cents over the past three weeks).

The 2006/7 season market has also started to trade with £150 ex farm available in pre-Christmas positions.

Pulses

Spring beans are still in the doldrums, with little to no interest as yet from the middle-east. There are concerns regarding possible reduced French yields due to the hot weather, however this is too early to predict at present.

The feed bean trade is also very quiet with continental buyers pegging buying equating to £82-83/tonne ex farm.

Market Report

Forward 136 cattle including 58 bulls, 769 sheep including 590 lambs. Light steers to 106p W Chambers & Son Marton heavy steers to 127p C F Beal Yedingham ave 108.3p light heifers to 117p J M Bulmer Kirkbymoorside ave 105.4p heavy heifers to 142p G I Marwood Harome ave 106.6p light bulls to 123p P Mason Cottam ave 104.3p heavy bulls to 118p Mrs M C Towse Welham ave 102.3p black and white bulls to 91.5p J K Nattrass Lockton ave 81.2p standard lambs to 120.2p R Harrison Thorpe Bassett ave 116.3p medium lambs to 118.6p J Wilkinson Langtoft ave 106.8p heavy lambs to 108.6p H Atkinson & Son Scampston ave 107.2p ewes to £39. M Midgley Painsthorpe ave £32.

Updated: 14:24 Wednesday, June 29, 2005