FAO FPI Lowest Point Since 2010

The Food Price Index (FPI) published by the Food and Agriculture Organization (FAO) fell for the sixth month in a row in September 2014 averaging 191.5 points down 5.2 points from August and 12.2 points from the same time last year. The fall means that the index has now reached its lowest point since August 2010 and makes it the longest continuous period of falls since the 1990s. The five commodity groups that make up the FPI basket showed different degrees and directions of change with sugar and dairy the main contributors to the fall followed by cereals and oils, while meat remained firm.

Unpaid Voluntary Environmental Land Management

Defra recently released data concerning the unpaid voluntary environmental management of land and attitudes towards the environment and understanding and awareness of the Campaign for the Farmed Environment. The data was collected from farms of at least 10 hectares of crops or grassland.

The findings show that during the crop year 2013-14, 450,000 hectares of land was managed under listed unpaid voluntary environmental measures with an additional 9,760 skylark plots and 7,387km of fenced watercourses. The largest land area of the measures listed was 161,000 hectares of fertiliser free permanent pasture followed by 109,000 hectares of over-wintered stubbles. The findings also show that 44% of farmers surveyed do some form of unpaid voluntary environmental land management. Many farmers think they are already doing enough for the environment and it was the main reason given by the 56% of farmers surveyed who do not have any form of unpaid environmental land management for not doing so. When those without any land already in unpaid voluntary environmental management measures were asked if they intended to do so, 15% answered 'Yes'.

The attitudes of farmers towards the environment are reflected also in their involvement in agri-environment schemes and 51% answered positively regarding membership of Entry Level Stewardship (ELS) scheme. When asked about their decision making regarding the environment about 80% of farmers surveyed put the greatest importance on the efficient use of inputs and protecting soil and water and considered that these should be put in the 'very important' category. Protecting wildlife was also important to a majority of farmers with 59% considering it 'very important'.

The number of farmers who consider that they have a good understanding and awareness of the Campaign for the Farmed Environment remained steady at around 15% between 2012-13 and 2013-14, 47% having some understanding and 12% having little or no idea. The most common source of information regarding the CFE was the farming press (64%) and CFE leaflets (43%) with 22% saying they had none.

Trade Deficit In Goods Now £27.4bn

The deficit on UK trade in goods widened by £0.9bn to £27.4bn in Q2 2014 compared with a deficit of £26.5bn in Q1 2014. There was a change in value of -£0.5bn or 0.7% in total exports to £71.3bn and a change of -£0.4bn or 0.4% to £98.7bn in total imports in Q2 2014.

At the level of the change in value by industry, exports in agriculture, forestry and fishing products fell by £45m and imports fell by £9m. Information and communications services exports increased by £25m and imports also increased by £2m. In professional, scientific and technical services exports fell by £3m and imports fell by £1m. Arts, entertainment and recreation imports increased by £91m and imports fell by £198m.

GDP Up 0.8% For Second Quarter

The increase in GDP for the second quarter remained at 0.8% unrevised from the preliminary estimate of July and is the second consecutive quarterly increase of 0.8% according to a statistical bulletin from the ONS.

Agricultural output decreased by 0.2% and construction remained flat but output in two of the four main industrial groupings increased in Q2 compared with Q1. Production increased by 0.3% and services by 1%.

On the annual comparison GDP for the second quarter of this year was 3.2% higher than Q2 2013. The figure is revised upward from the preliminary estimate of 3.1%.

API Prices Lower Than Last Year

The agricultural price index (API) for all outputs increased by 0.8% while the API for all inputs decreased by 0.4% in April. Prices overall are lower than last year. At the same time last year the price index was 7% higher than this yea for output while inputs were 4.2% higher.

On the outputs side all price indices for crops this year are lower mainly due to a supply shortage due to the poor harvest of 2012. Energy prices fell again. Feed prices increased by 0.7% over the month but are still 11% lower than last year. Fertiliser prices also fell by 2.2% in April but are still 9.1% lower than last year.

Fall In Agricultural Productivity For Second Year In A Row

Total factor productivity (TFP) in agriculture is estimated to have fallen marginally by 0.1% between 2012 and 2013. There was an increase of 0.5% in the volume of outputs compared with 2012 but a larger increase of 0.7% in inputs. It is second year in a row that TFP has fallen.

Final output by volume at market prices increased by 0.5%. The increase was offset by a 0.7% increase in the volume of all outputs and entrepreneurial labour used in the process.

Long term trends show that total factor productivity increased by 20% between 1988 and 2013 largely due to the volume of outputs remaining the same while the volume of inputs and entrepreneurial labour fell by 18%. TFP was basically unchanged during the mid-80s to mid-90s, it grew by 18% between 1997 and 2005 and has remained unchanged since then with year to year variations.

Total factor productivity is a key measure of the economic performance of the agricultural industry as it measures the efficiency of the industry at turning inputs into outputs.

Output Up By 2.9%

Production output increased by 2.9% over the year to January 2014. Manufacturing, the largest component of production figures, increased by 3.3% and water supply, sewerage and waste management increased 12.6%.

Of the manufacturing components, the main contributors to the 3.3% increase were rubber, plastic products and other non-metallic mineral products manufacturing, the manufacture of machinery and equipment not elsewhere classified and the manufacture of transport equipment.

Production output increased by 0.1% over the month between December 2013 and January 2014. All sectors increased except mining and quarrying which decreased by 3.4%. The remaining sectors all of which reported an increase grew by 0.4%.

The main components contributing to the increase over the month were the manufacture of rubber, plastic products and other non-metallic mineral products, the manufacture of machinery and equipment not elsewhere classified and other manufacturing and repair.

The second estimate of GDP suggested the economy grew by 0.7%. Three of he four main groupings experienced growth with agriculture experiencing a decline of 0.1%. Services and construction grew by 0.8% and 0.2% respectively. Services continues to be the main contributor to growth.

Milk Prices Contribute To Rise In API

The overall agricultural output price index increased by 2.3% in November, the first time it has risen since May 2013. Even though the API output price index rose this November from 118.1 to 120.7 it is still 2.4% lower than November last year. The API for all inputs fell by 0.2% from 112.9 to 112.7 and is 2.1% lower than last year.

The continued increase in milk prices was one of the main contributors to the rise in output prices. Both milk and milk products were still in global demand for the sixth month in a row. Prices are up 15% on last year. Cattle prices are continuing to fall after the high prices seen in the summer.

Input prices haven't changed much. Fertiliser prices are 18% lower than last year but expected shipments of straight nitrogen fertiliser from North Africa were delayed due to regional problems resulting in a slight rise in price.

Farming Incomes Up In English Regions

All English regions have seen an increase in their total farm incomes over the past five years according to a statistical release from Defra. Total income from farming in England as a whole increased by 19% and regional increases range from 9% in the South West to 33% in the East Midlands.

Agriculture makes an important contribution to the national economy. It contributed 0.61% to the economy but contributions vary from region to region. At local level the contribution of agriculture to the local economy ranged from 0.17% in the South East to 1.26% in the South West. It contributes least to the local economy in London and the South East.

England can be divided geographically into livestock farming areas in the north and west and arable areas in the south and east. This is reflected in the fact that livestock output was most prominent in the South West and the North West and crops were predominant in the East of England.

In England as a whole, agriculture's contribution to the economy was £7,125m (0.61%) and employed 1.14% of the workforce.

Biggest Fall In Agricultural Productivity Since 1985

Total factor productivity figures from Defra suggest that the agricultural industry has seen a fall of 2.9% between 2011 and 2012 giving the lowest level since 2007 and it is the biggest single year fall since 1985. The poor levels of productivity reflect the poor weather conditions according to Defra.

The picture can be looked at over the longer period. Between 1986 and 2012 the volume of final output has remained fairly stable and the volume of all inputs and entrepreneurial labour has fallen by 19%. Looking at it that way total factor productivity has increased by 21%. This is he first Defra release to use 2010 as the base year for total factor productivity.

New Pocketbook Of Agricultural Statistics

There are some interesting statistics in the new Pocketbook on agriculture, forestry and fisheries statistics.

France is the main producer of cereals in the EU28 with 285m tonnes or 24% of the total, Germany produced 16% (45.4m tonnes) and the UK contributed 19.5m tonnes or 7%. France was also the biggest producer of common wheat with 28% of total EU28 production, grain maize (26%) and barley (21%). Germany was the main rye and maslin producer with 43%.

The largest quantity of cow's milk was produced by Germany with 29.7m tonnes or 21% of total EU28 production then France with 24.4m tonnes or 17% and the UK with 13.6m tonnes or 10%. The UK was the biggest producer of drinking milk with 6.9m tonnes or 22% of EU28 production. Germany was the biggest producer of cheese (23%), cream (21%) and butter (23% in the EU28 with France following with 21%, 16% and 20% respectively.

First Estimate Of GDP Shows Growth Of 0.8%

GDP growth is estimated to have increased by 0.8% in Q3 2013 compared with Q2. Output increased in all four main industrial groups. Agriculture increased by 1.4%, production by 0.5%, construction by 2.5% and services by 0.7%. The yearly comparison shows that growth is 1.5% up on last year.

GDP Increase Not Recession Fears But Growth

GDP increased by 0.6% in the second quarter of 2013 compared with Q1 2013. The four major industrial groupings in the economy increased in Q1 2013 compared with Q2 2013. The largest upward contribution to the increase in GDP came from services with an increase of 0.6% adding 0.48% to the total GDP increase. Agriculture increased by 1.1%, production 0.6% and construction 0.9% (ONS).

GDP Growth 0.6%

The monthly estimates of GDP calculated by the NIESR suggest that GDP output grew by 0.6% in the three months to June following three months of output growth at 0.6% to May. These figures also suggest that there was economic growth of 0.6% per quarter in Q2 2013 from 0.3% during Q1 2013.

Agricultural output has remained stable at 98.1 since March though there has been growth quarter-on-quarter by month, construction has grown slightly month-on-month since March to 91.4, private services has also growth in the same way to 105.3 and public services continues to grow as it has done since December to 103.7.

Fatalities In The Workplace

The Health and Safety Executive (HSE) fatalities in the workplace provisional statistics for 2012-13 say that the number of workers fatally injured at work fell in the year 2012-13 to 148. The figure of 148 is 18% lower than the average for the last five years and gives a fatal injury ratio of 0.5 deaths per 100,000 workers, down from the 5-year average of 0.6 per 100,000. The summary also tells us that 113 members of the public were also fatally injured in accidents related to work. The figure excludes 310 related to railways (including suicide and trespass).

The main industry sectors in terms of fatalities breakdown as follows: agriculture 29; mining and quarrying 2; manufacturing 20; gas, electricity and water 12; construction 39 and services 46. When applying a ration of fatal injuries per 100,000 workers the statistics are as follows: agriculture 8.8; manufacturing 0.7; gas electricity and water 8.2; construction 1.9; and services 0.2, and all industries 0.5.

When fatal injuries suffered by members of the public are included the total figure for all industries rises to 571. There were 7 fatalities among members of the public in agriculture, 1 in manufacturing 4 in gas, electricity and water, 3 of which were in waste and recycling, 5 in construction and 406 in services.

Regional comparison of number and rate of fatal injuries of the 148 shows that the North East recorded 2 fatalities in 2012-13 and a 5 year average of 6. The South East reported 22 fatalities and a 5 year average of 16. Scotland also reported a total of 22 and a 5 year average of 22. It should be noted that there are strong regional differences in industry and occupation variables.

Farm Gate Price Of Milk Continues To Rise

The average farm gate price of milk in the UK in April 2013 was 30.09 pence/litre. In April 2012 the price per litre was 2.26p less than this year. The average butterfat content was 4.1% (4.06% in April 2012) and the protein content was 3.22% (3.27% in April 2012). The price of milk has risen every month since the new year after a fall between December and January.

Farm Gate Prices Down In December

The prices farmers received for their products fell by 0.4% in December on November but is still 11.8% higher than last year. Farmers were also having to pay on average 3.2% more on the monthly comparison and 5.4% on the annual comparison for their goods and services. Main crop potatoes have almost doubled in price since December 2012 due to low yields and low quality. Cereal prices have grown by 10% from November and 38% on the annual comparison. Dessert apples' prices have increased by 9% on the month and 25% on the year. Sheep prices fell by 28% over the year due to higher volumes and cheap imports of sheep meat.

Lower Farm Incomes Expected In 2012-13

Provisional estimates for average farm business income for 2012-13 suggest that it will fall across the board due to the poor growing season and harvest. Higher output prices in the cropping sector are expected to only partially offset lower yields and quality. Higher costs are also expected to lower incomes especially in the livestock sector. The single payment was 10% lower on average than the previous year due to the strengthening of the pound against the euro.

Estimates Say GDP Down

GDP was estimated to have fallen by 0.3% in the fourth quarter of 2012 comapred with the previous quarter according to a statistical bulletin from the ONS.

The production industries output was said to have decreased by 1.8% over the quarter, construction increased its output by 0.3% but in services there was no change. GDP as a whole remained the same as compared with Q4 2011. Transport, storage and communications increased by 0.7% with the largest contributions coming from motion picture, video and TV and programming and broadcasting. Business services and finance also increased by 0.4% with the largest contribution coming from employment activities. The agriculture sector fell by 0.6% on the same period in the previous year. While agriculture did not contribute to the change in GDP quarter on quarter, on the year on year analysis agriculture decreased by 3%.

The growth rate of the level of GDP was affected by two factors worthy of note. The level of GDP in the third quarter was helped by the London 2012 Olympic and Paralympic Games and there are some signs of a 'fall back' from these events. The other factor that should be borne in mind was the longer than expected maintenance of the largest North Sea oil field which reduced the oil and gas extraction component for the quarter.

Total Income From Farming Up Across The Country

The second estimate of agriculture in the English regions from Defra suggests that total income from all farming increased significantly in all NUTS1 regions in 2011. The North East had the largest increase with 38% and the East Midlands had the next largest increase with 33% on 2010. The smallest increases were in the North West and the West Midlands with a 20% increase in each.

Total income from farming has increased in all NUTS1 regions, in the medium term, between 2005 and 2011. The South East has seen increases of 364 to 464 and the North East 191 to 291. The smallest increases were in the East of England (224%) and the West Midlands (225%).

The relative importance of agriculture to each region can be seen in its share of regional gross value added (GVA) and the regional workforce. The greatest contribution to GVA in 2011 was made in the South West with 1.3% and the least in the South East with 0.19%. In England as a whole agriculture contributed 0.64% to GVA.

Agriculture made its greatest contribution to the regional workforce in the South West with 2.22% and the least in the South East with 0.5%. The industry contributed 1.1% to the workforce in England as a whole.