With no formal deadline by which farms must apply for Sustainable Farming Incentive (SFI) actions, together with a big increase in the number of SFI actions available and BPS payments progressively reducing, it is no surprise that we are seeing an increase in the level of interest in SFI applications from farms. Farm Economics covers two aspects of SFI in this briefing: first we cover where you can run SFI actions in parallel with any Countryside Stewardship (CSS) options that you may have, and second we look at how best to keep on top of the evidence that you need to keep....tedious as it may be it is also a mandatory requirement as part of your SFI payment.
Also in this issue, Cefetra Grain provide valuable insight into how the grain markets are moving and the key global drivers as we get towards harvest season.
County Insurance have been providing insurance to farms for 40 years and have an expert team able to discuss your cover needs.
SFI and CSS - risk free income boost to counter BPS reductions
With DEFRA having increased the number of SFI actions available to farms from 23 to over 100, more farms are looking to counter the fall in income from BPS reductions by looking to apply for SFI actions. Currently there is no application deadline and you can apply whenever it suits. A few farms have asked if they can apply for SFI whilst in the middle of an existing CSS agreement. The answer is a qualified 'yes' and with over 100 SFI actions and over 150 CSS options, there are a lot of conditions around which SFI actions you can carry out on land with existing CSS options.
All the detail of these conditions are in the DEFRA web pages but can take a long time to navigate. If you want a quick view on which SFI actions can be adopted on land with existing CSS options then just click below - you can type in the CSS option and eligible SFI actions together with the relevant DEFRA page and income will be shown.
Of course, taking on SFI and CSS agreements is risk free - but you must comply with the mandatory requirements to keep information records; precedents do exist with CSS agreements where farms failing to produce the records have had income retrospectively clawed back to the beginning of the agreement. More on this below...
SFI and CSS - meeting your mandatory evidence keeping requirements
So many farms and agents we talk with are starting to drown in photos taken as part of the required evidence gathering for both SFI actions and CSS options. Whilst the 'evidence keeping' requirements in general are less stringent than many CSS options, there remains evidence to keep in order to reasonably ensure the aims of the actions are being met.
There are a number of partial solutions available to farms to organise photos ranging from using the 'File Explorer' on your desktop with organised folder names etc., through to manually uploading photos onto various interactive maps. The issue is often that photos are taken of various fields in bulk on a smartphone and then it is an onerous task to download them, let alone remembering which photo relates to which field and which particular SFI action or CSS option.
The Farm Economics App is focussed on taking this pain away in a couple of simple ways:
All the relevant information - whether invoices, statements, plans or photos are all automatically stored for the correct CSS option/SFI action and the correct field
You have a live dashboard during the year to let you know how much of the mandatory evidence you have collected and how much more you have to collect
The smartphone Farm Economics App enables you to take photos that are automatically allocated to the correct option/action and field
If photos have GPS information this will automatically be uploaded to the relevant interactive maps (eg. Google Maps, The Land App, Gatekeeper).
Find out more about the Farm Economics App by clicking the button below.
CEFETRA'S GLOBAL AND EUROPEAN TAKE ON GRAIN MARKETS - JUNE '24 MARKET REPORT
Another month closer to harvest and at long last it is beginning to feel more like summer, as the rain eases and the sun looks set to stay for a while. In fairness, the majority of spring crops have enjoyed the weather they have faced since being drilled, with enough moisture in the ground now to carry them through to harvest you would hope. For some forward winter crops, perhaps OSR and Barley, the sunshine may be a little late and we could well see some small seeds/low bushels, which can have a big impact on yields. Hopefully the wheats have hung on just enough that this sunshine will help fill grains out, which could result in some reasonable yields… time will tell.
Markets have unfortunately lost ground across the board, with OSR currently around €30-35/t off the highs at time of writing (24th June). Wheat is back around £30 since the end of May, now sub £200 ex farm for Nov. Barley remains around £25 discount to wheat, potentially stretching a little further than that now in some areas. Worth noting that even with the market falling as much as it has, funds have only slightly decreased their long position. (See below image).
(Ceres Analytics, 2024)
The general consensus is that buying from funds exaggerated the move upwards when the Russian weather stories began to look serious, resulting in long positions being built. Now the Russia weather is priced into the market and there is little fresh news coming forward, the market has felt some pressure, with funds selling futures and closing out some positions. Interestingly, it is rumoured that Russia have removed their wheat floor price, which has been in place for quite some time.
Having started at 92 million tonnes, the current production estimate for Russian wheat is anywhere between 75-80 MT.
All eyes will now be focused on the corn belt in the Mid-West (USA), with July being the key growing month for the crop over there. I believe they are already experiencing some hot and dry weather, but have some rains in the forecast. Any issues with corn going forward, added to the reductions in production from Russia (that we are already aware of) may cause another rally/spike in the market. Perhaps not back to the highs we saw towards the end of May, but certainly an improvement from here. Be advised, this may not happen at all – there is a chance values could drop further if no weather issues arise.
Indian wheat exports are another area to keep an eye on, as the nation plans to replenish low stocks this season coming. Import duties are likely to be scrapped after June, allowing mills and traders to purchase grains from other origins.
If we saw £200 for ex farm wheat again, I would suggest topping up some sales, or certainly making a start if you have nothing booked yet! The same with feed barley at £175/180. Current values would be between £187-£195 for Nov wheat, depending on location. Group 1 premiums remain north of £65 at present, with group 2’s around £10 lower. £400 for harvest OSR would be another target for most, the market has some work to do to get back there – currently sitting around £375 ex.
To find out more, please contact the team at Cefetra Grain: Simon Wilcox, Manager – UK Farm Grain Origination, 07774 822507, wilcox@cefetra.co.uk; Josef Grinczer, Farm Grain Buyer, 07712 325197, grinczer@cefetra.co.uk ; Ian Jervis, Farm Grain Buyer, 07497 185361, jervis@cefetra.co.uk
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