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2007 Making a sowÕs ear from a silk purse Does anybody out there actually read these Annual Reports? I must
assume that they do not and thus nobody will be surprised if I start with a
small re-cap. Two years ago in 2005 I whinged ÒThe price of our main product,
wheat, remains static at around sixty pounds (per tonne)Ó. Last year my final
tear-jerking peroration read: ÒYet today this particular farmer is a
reasonably happy human being. He still has some wheat in the grainstore and
thus would be even happier if the price of wheat reached £100 per tonne.Ó As I write this at the beginning of December a tonne of wheat is worth
around £155 per tonne. Two months ago the price actually hit £185 per tonne Ð
almost three times more than it had been two years ago. So it stands to
reason that this farmer today luxuriates in his bubble bath slurping Krug and
humming the Hallelujah Chorus from dawn till dusk. Right? Wrong. The reason is that the same farmer became so orgasmically excited when
the price of wheat reached £100 per tonne that he sold two thirds of his
harvest. For a few weeks he was smugger than any bug in any rug. But then
something very strange happened. Suddenly a weird combination of commodity
speculators (bored with pork bellies and platinum), Chinese consumers
(acquiring a taste for beer and hamburgers), drought-stricken Australian
farmers (some of whose harvest failed completely) and American maize-growers
(who sold their crop for biofuel and not cattle-feed) sent the price of wheat
into orbit. Within the space of six weeks my smugness evaporated. On some
occasions this autumn the price actually rose by more than £15 per tonne in a
single day, which is more than it normally rises in an entire year. I had (to
use an agricultural idiom) achieved the improbable. I had made a sowÕs ear
out of a silk purse. Compared to this economic earthquake, everything else which happened on
the farm seems trivial. But other important events were, I must force myself
to recall, also happening. Our canonisation into the ranks of agricultural
sainthood (otherwise known as the Higher Level Scheme or HLS) made us feel
slightly warm, faintly cosy and extremely self-righteous. In the course of
the year we received a series of cheques amounting to around £45,000 as a
reward from And this was just as well because our traditional cheque, now known as
the Single Farm Payment (SFP) is shrinking rapidly as the Common Agricultural
Policy tries to wean us off the old-fashioned subsidy teat. But forget high finance and the politics of the CAP and instead
concentrate on what is happening under our feet. Here we are facing a tsunami
the likes of which I have never remotely seen in my sixty six years at
Thriplow. It is a tsunami not of water but of rabbits. Trillions (maybe
quintillions) of them now inhabit hedge bottoms, banks and any uncultivated
land. They eat, and destroy, acre after acre of crops so that today we have
some fields which, at first glance, look like complete crop failures. Although rabbits are by far our biggest problem, we also find ourselves
faced with three other animals which I never saw at all during my childhood.
These are fallow deer, muntjac deer and Ð most surprisingly of all Ð badgers.
The fallow deer probably do more harm by trampling down crops than by eating
them. The tiny and timid muntjac
(no bigger than a boxer dog) does untold damage in the woodland (and
in peoplesÕ gardens) where they devour the young plants. The badgers were
unknown on the farm until a few years ago when we first noticed a couple of
setts beside a spinney of trees. Today we find badger metropolises right out
in the middle of fields. There must be at least ten on the farm, and when one
realises that a decade ago there were none, it is worrying to think what will
happen in a decadeÕs time. In the meanwhile, however, they are protected by
law and we treat them with no affection but great respect. WHEAT At 9.1 tonnes per hectare this was an average harvest. It was neither
good nor bad. But what made the harvest extraordinary was its eerie
consistency. In a normal year the northern end of the farm with its heavier
soil invariably yields a lot more than the southern end of the farm beside
the A505 with its thin drought-prone soil which my father always said should
never grow wheat at all. First year wheats always yield at least two tonnes
per hectare more than second year wheats. And, of course, low quality feed
wheats yield more than high-quality milling wheats. But this year, for some inexplicable reason, the differences were very
small indeed. Robigus did best at 9.5 tonnes/ha, followed by Glasgow, the
feed wheat which did so well last year, but this year managed 9.2 tonnes/ha.
Einstein, which was grown as a second wheat, produced a respectable 9.1
tonnes/ha. The two milling wheats, Malacca and a new French variety called
Sogood, did 9.1 and 8.7 respectively. Another oddity about this harvest was that we had finally decided not
to produce milling wheat. All our previous attempts, involving lots of late
nitrogen, ended in failure when the millers rejected our sample due to its
low protein. So this year, even though we were still growing a small acreage
of Malacca, we resolved to treat this variety just like a normal feed wheat
and apply no late nitrogen whatsoever. The problem was that nobody appeared
to have told the Malacca and Ð glory of glories Ð it somehow managed to
produce a respectable milling sample which we were able to sell for £150 per
tonne. Miracles do happen occasionally. OILSEED RAPE For most of the growing season our rape looked very good. The slugs
were controlled in the autumn and throughout the winter the pigeons left the
crop largely alone. After flowering as harvest approached, the rape appeared
excellent. With my enormous experience and profound knowledge I knew we were
destined for a good harvest. As it happens, however, we experienced the worst oilseed rape harvest
for a decade. I had, however, made the shrewd decision to sell the crop on an
Energy Contract (which pays a slightly higher price than had one sold the
crop for oil production). Being a cautious type, I estimated the yield
conservatively and thus sold what I expected to be 75% of our total
production. When the combine eventually left the last field the overall yield
worked out at a pathetic 2.8 tonnes/ha. I realised that I had actually sold
more than we had produced. This was deeply embarrassing and slightly
expensive. SUGAR BEET At the time of writing we have only lifted one of our three fields of
sugar beet so I must restrain my optimism lest the remaining two fields
revert to normal. However, the yield so far is the highest I have ever known
at Thriplow by at least ten per cent. Indeed it is so high that when I was
told the yield on my return from spending a month on a train between Hong
Kong and I begin to understand why BEANS Beans are a pretty marginal crop at Thriplow. They have managed to
survive because over the past ten years they have lost slightly less money
than their great leguminous rival, peas. This year, however, they were
triumphant. Indeed the Wizard beans were as good as our oilseed rape was bad.
In fact beans, at an average yield of 4.8 tonnes per hectare, were the best I
have known for a very long time. What caused this triumph? Beats me. We kept
our own seed (but only after having NIAB check the seed for germination and
aschochyta) and so the variable costs were low. But what really made the crop a success was the fact that we sold them
in November for £180 per tonne. It has been a long time since beans made a
profit. The problem was we only grew 58 hectares. SETASIDE Once again eight percent of the farm produced absolutely nothing.
However, as a result of todayÕs shortage of wheat in the world the wise men
of MACHINERY If you want to buy a tractor today it is probable that you will have to
wait at least nine months because every arable farmer in Oh yes, I nearly forgot. We also spent a mere £120,000 this year on a
new cedar shingle roof for Thriplow Farm and two cottages. When my father
built the the farm in 1937 the total cost was £6000. Last time we replaced
the roof, back in 1973, it cost us £15,000. What will it cost in 2045 when
the roof next needs renewing? LIVERY STABLES We have built another five stables in the old cubicle shed this year.
The new Manege (which everybody insists on calling a Menage) is working well
and seems to be popular with our customers. This year we have reorganized
some of the paddocks by putting in a new pipeline which will feed a series of
new troughs. This will enable us both to house a few more horses and also to
be more flexible with the grazing. THE FUTURE The question which obsesses every farmer in It is possible today to sell wheat forward for November 2008 for £125
per tonne. But is this sensible? In the good old days when the price moved
incrementally, the risk of selling forward was never very great. At worst you
might find that you were maybe a tenner a tonne below the market. But today,
with the gut-wrenching volatility we have seen in the past few months, it is
quite possible that any price you agree today could turn out to be fifty
pounds too high or too low come the day of delivery. Since we at Thriplow
produce around four thousand tonnes of wheat every year this could easily
mean that we could ÒloseÓ (i.e. fail to maximise) our income by two hundred
thousand pounds or more. This is a very frightening scenario, and one that
not a single farmer in the world has ever experienced before. The pessimists, who feel the price can only fall, point to the vast
increase in the area of wheat planted around the world. The abolition of
setaside in the EU will by itself mean a huge increase in the European wheat
crop. The Australian drought may finally end, which would boost the Down
Under wheat crop massively. The Chinese leviathan may well run out of puff,
and with it the demand for wheat and barley. However, having spent three
weeks in that country this autumn I was amazed (and rather frightened) by
their visibly exploding economy. The optimists take a fundamentally different view. They accept that
possible Australian rain and definitely no EU setaside will admittedly
increase production. But they feel that this additional output will easily be
absorbed by an unquenchable demand. To support their position they point to
the fact that world wheat stocks are at an historic low. They see the
economies of All of which would make an interesting seminar at the Department of
Economics down the road in Confused but not unhappy. O.W. December 2007 |
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