East Anglian agriculture is affected by the complex range of factors driving global economics – and industry experts have given their insights on what changes farmers can expect in the year ahead.
Leading agricultural industry representatives discussed the impact of global influences - and the current growing season - on East Anglian agriculture at a meeting held by Suffolk-based farmers' co-operative Fram Farmers.
Freddie Humfrey, national feed wheat trader at ADM Agriculture's grain division, started proceedings by outlining how the difficult recent weather conditions had influenced the value of British wheat compared to global futures markets.
"There's no doubt it's been a very tricky winter planting season, for wheat in particular, and as such we've seen considerable appreciation versus other origins," he said.
"London Nov20 futures have moved from a £20/tonne discount to Matif Dec20 wheat futures to a £2-3/tonne premium, and this exemplifies a market in short supply and trying to source additional stocks. From this perspective it would be easy to think that UK wheat values will continue to appreciate.
"Unfortunately this is no longer a reasonable expectation. We are now at a point whereby imported wheat, and also corn, compete on a delivered mill basis and thus cap the potential upside in domestic wheat values.
"A global picture of comfortable ending stocks and a strong stocks-to-usage ratio of around 39% gives little optimism for global wheat prices and so capping the UK upside further.
"Over-yearing wheat from this season to next shows a good return on the carry and where possible will help prop up budgets on an otherwise tricky marketing season going forward."
Marc Ostwald, chief economist and global research strategist at ADM Investor Services International, said: "This year the global growth outlook is much more optimistic, however, there are still several key risks very much holding markets and the global economy back, especially the EU/USA trade concerns, Brexit and weak Eurozone growth."
Mr Ostwald also mentioned the effect of the Coronavirus outbreak on the global economy and how it illustrated China's importance.
"The March 11 budget is probably the most important budget in the last 30 years," he said. "It must address many of UK's 'home-grown' problems and prepare the UK for Brexit-related disruption, especially in agriculture. The end of CAP [the EU's Common Agricultural Policy] subsidies will be one key element to consider.
"As far as trade negotiations go, we shouldn't focus on tariffs; we need to look at regulations and standards.
"Overall, it is quite likely that UK agriculture will see some disruption, but an array of opportunities should open up in the medium to longer term."
Mark Tucker, business development and agronomy manager at Yara, gave a fertiliser outlook and market update. "When looking at fertiliser, the market forces can be described by one word - Asia," he said.
"More specifically, it is the production figures in China and their level of export, compared to the demand that comes from India. Global supply and demand is always fairly tight, so pure economics comes into play and sets the urea value, which then establishes the general farm price."
Mr Tucker said there is a clear change of direction in the regulatory framework for fertiliser, as policy-makers see more urgency to tackle some of the big issues associated with agriculture and fertiliser use.
"Ammonia is currently the number one issue, with farmers being urged to keep emissions low," he said. "The uptake of technology becomes a must to ensure 'decision justification' and move nitrogen use efficiencies towards the desirable 80-90%.
"What about the 2020 crop? Firstly, roots will have a different structure - shallow adventitious roots will be dominant, as the extended waterlogging is likely to have killed the deeper, seminal roots. This will be a legacy with us for the year so as the season progresses an appropriate crop nutrition strategy should be adopted. Secondly, grains/ear or pod, where biomass is compromised, needs to be more in focus to recover yield."
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