Agricultural Discussion Society
Newsletter December 1995
It must be autumn again already because here we are at the start of a new season at the discussion society. The secretary has organised an excellent programme for us (I have to say that in case no-one else does) through the winter months. We normally meet on the first Monday of the month but because most of us are busy on the land in the early autumn, in October we go for the second Monday. Murphy’s law says that we will always be wrong and this will coincide with a fine day while if we had chosen the earlier date people would not have been as hard at work and attendance would be better. Nevertheless we had about 40 people come to hear Richard Whitlock (who is a grain trader for Banks of Sandy) tell us about the prospects for the coming year and up to the turn of the century.
We were told about the many factors that cause the price of wheat to fluctuate. The market is much more volatile since the CAP reforms changed support for agriculture from price support to direct payment to farmers. We are now theoretically trading at world prices and fortunately for U.K. farmers this coincides with a world shortage forcing up the world price. Also the endless decline in the value of the pound since we left the ERM means we get more pounds for the dollars in which world grain is traded. I am sure some people will not believe that there are shortages anywhere, because surely we have all those grain mountains in stores across Europe costing the taxpayer a fortune. They no longer exist, set-aside and a run of below-average harvests have done their worst and world stocks are now as low as they were in the mid 1970’s when we saw a doubling of the price of grain.
Looking to the future Mr.Whitlock felt that we would benefit from good grain values for the next year or two until world stocks increase as more land is taken out of set- aside in the USA and Europe. He did add the proviso that we must produce good quality because a wet harvest can lead to rubbish grain that will not sell on the world market even if there is a shortage. As a sobering comparison he said that today poor quality grain (like we produced in 1987) would be worth £86 per tonne compared with over £110 per tonne that we were being offered this year.
Looking further on to the turn of the century, the world grain trade will be more and more affected by the GATT agreement and he was very blunt in his opinion about this. Mr.Whitlock felt that European farmers have been sold a pup by the Americans. He could visualise the reduction in the amount of grain that Europe is allowed to export combined with an increase in what we will be expected to import from America and their potential to increase production could lead to severe pressure on the price that we can sell our grain for. It will all depend on the demand from other parts of the world such as the pacific rim, India, and China that could soak up the extra production, but then on the other hand it may not.
We had a second dose of crystal ball gazing at our November meeting when Dr Michael Murphy from Cambridge university gave us the results of his latest survey of farmers' incomes. Dr. Murphy has been doing this survey for 34 years and many of our members provide him with data. He has spoken to our society on several occasions over the years and he has a reputation for always painting a very grim picture - Gloom & Doom has always been his byword. We do not mind because he is also a very entertaining speaker and he can make pages and pages of figures seem interesting.
He covered many of the same topics as our previous speaker but looking at them from a different viewpoint and even Michael Murphy had to admit that we are experiencing some “good times” at the moment. He was also fairly confident that things looked fairly good for the next few years, but he was very pleased to be able to warn us of the downturn that he sees as we approach the turn of the century. He was also worried that he was seeing a general increase in costs as suppliers, landlords and estate agents decide they want to get their hands on some of the money. His message to us was to enjoy the current upturn but not to become inefficient or squander it. We may need the money to survive trading in a free market when the GATT agreement comes into effect.
Looking in my crystal ball I see that on 4th December we have Peter Thompson from the Game Conservancy who will be encouraging us to make room for wildlife on our intensive arable farms.
On 8th January we Barney Holbeche from the NFU to give us an insight into the minds of the politicians at Westminster so we may get some clues as to what to expect after the next General Election.
An extra meeting this year is a joint venture with the Village Environment Group on 23rd November when we will hear Robin Page (environmentalist and presenter of One Man & His Dog) speak.Stephen Graves (Secretary)
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