Food security and SFI updates: Grain market daily

• UK feed wheat futures (Nov-24) closed at £193.25/t yesterday, down £2.75/t from Wednesday’s close. The May-25 contract lost £1.90/t over the same period, to close at £204.00/t. The domestic wheat futures tracked global prices down yesterday.
• Global wheat markets were pressured on expectations of a strong US production, competitive exports from the Black Sea and generally slow demand. Also, the slow exports from Europe have shifted focus away from the recent concerns about declining production in western European.
• Paris rapeseed futures (Nov-24) closed at €493.50/t yesterday, rising €0.75/t from Wednesday’s close. The May-25 contract gained €1.00/t over the same period, to close at €494.00/t.
• Rapeseed prices faced downwards pressure despite the EU commission reducing its forecast for the 2024/25 EU rapeseed production to 18.4 Mt from 18.8 Mt. However, Chicago soyabean prices gained on hot and dry weather conditions expected in the central US.

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The UK Food Security Index shows that there is a ‘broadly stable picture’ in terms of UK food security, however there are longer term risks to food production from climate change. The key conclusions are there is stable domestic production across all food, with productivity rising, and that imports come from a diverse range of sources to support stable food supply.

The nine indicators used in the food security index are:

• Global food supply for human consumption
• Share of global cereals and soyabeans internationally traded
• Production-supply ratio
• Agricultural total factor productivity
• Agricultural land use
• Energy and fertiliser prices
• Business investment
• Biosecurity risk
• Consumer confidence in food supply chain actors

The definition of food security is “when all people, at all times, have physical and economic access to sufficient, safe and nutritious food that meets their dietary needs and food preferences for an active and healthy lifestyle”. The nine indicators cover the physical availability dimension of food security, however there is also the physical and economic access to food, utilisation of food, and stability of food supply that are not fully considered within the index. A key thing to note is that the indicators are based on official data so there will be a time lag, therefore not considering any impacts of the difficult weather conditions over winter 2023/24.

Another topic of discussion around food security is the updates to the SFI scheme. There have been some concerns recently about the impacts on food production from the SFI scheme as early versions of the scheme had no limitations on the amount of land a farmer could enter into the different actions. After a difficult winter there were concerns that larger areas of farmland could be entered into high paying actions such as pollen and nectar flower mixes and grassy field corners and blocks. There has recently been an update to both the SFI and Countryside Stewardship (CS) schemes which limits how much land can be entered into the land sparing schemes.

Defra have published statistics on the uptake and land use of CS and SFI. The data has allayed the fears around huge swathes of farmland being taken out of food production. It showed that the amount of land entered into the schemes was very small compared to cash crops areas. The four main SFI actions which could compete with cash crop areas account for 210,000 ha. In comparison, the Defra June survey 2023 showed that 1.5m ha of land was used for wheat and 800,000 ha for temporary grassland.

This confirms that land being taken out of production and placed into the environmental schemes should not negatively impact food production and subsequently food security. Additionally, if the SFI actions are targeted at problems areas on the farm there is evidence to say it could support productivity growth and food security in the long term.

Furthermore, these are short term agreements which can be used within the rotation, and land can move between food production and the delivery of environmental good, or a combination of the two which means farmers can respond to market and weather conditions.  

We will be unpicking the Food Security Index and the indicators in more detail and what this means for UK food security as well as continuing our analysis on the SFI scheme.

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