This month has remained milder than average and crops continue to look well and are going into winter in good fettle.

With variable costs rising dramatically, farmers will relish kind weather over the next few months and hope that disease levels do not rise too high if it remains mild.

Now that COP26 has come to an end, there are many schools of thought as to how successful the outcome had been, but there will be changes in the way some countries proceed in future regarding the environment.

To help farmers move to more sustainable production methods the Scottish Government will fund carbon audits and nutrient management plans.

It will also establish a livestock data performance feedback scheme for the beef sector, aimed at improving the emissions and economics of beef enterprises but importantly, the government said it would not support policies that reduced livestock numbers and that existing support payments would be maintained from 2022-2024.

A total of 103 countries agreed to reduce methane emissions by 30%, compared to current levels by 2030 and hope to limit global warming by approximately 0.2°C by 2050.

Methane is a significantly more potent greenhouse gas than carbon dioxide and is responsible for a third of current warming from human activities, but methane emission is frequently connected with farm animals even though it is more relevant to fracking, oil and coal production.

Scotland has also signed up to the 4 per 1000 initiative which aims to boost carbon storage in agricultural soils and reduce the global carbon footprint with an annual growth rate of 0.4% in soil carbon stocks which should help to stop the increase in atmospheric CO2 levels.

Nothing in connection with COP 26 is going to happen overnight, or even over the next number of years but costs for food production are rising now and thankfully so are prices at present to help offset some of those added costs.

The Agricultural Inflation Index has recorded the second highest rate of inflation since it was launched in 2006 and overall, the cost of farming inputs has increased by nearly 22% which significantly exceeds the rate of inflation experienced by consumers over the past 12 months.

Fuel has increased by nearly 80% over the same period and last week the UK average diesel price exceeded 150p/litre for the first time. Until last month, the highest average price of diesel was 147.93p/litre recorded in April, 2012, and at 150p/litre will bring in even higher costs for goods and services.

Fertiliser prices, again over the same period, increased by more than 50% and at the same time the food element of the retail price index has gone down by 0.7%, highlighting a continued squeeze on margins for farmers. It also showed the significant impact that increasing prices, coupled with current supply and transport difficulties, are having on farms.

Last week, a record price was reached at $1000/tonne for bulk urea being delivered by boat – exceeding the price last seen in 2008 when speculative investors pushed up prices. India is looking to buy a further 2m tonnes of urea and prices could yet exceed $1000 /tonne.

Prices will not be helped by Russia announcing a large quota reduction in ammonium nitrate fertiliser exports from December 1 and this will add more pressure to supplies.

Feed barley prices have increased recently and there has been some export trade taking place as well, but supplies into Holland have been curtailed by low water levels on their main transport routes for their boats and they are looking at delivery from the UK direct to their coastal ports as UK barley is currently the cheapest at present.

Barley exports for September were estimated at 101,700 tonnes, taking the season to date total to 266,600 tonnes – or 4% down on the same period last year.

More feed barley than normal is being consumed by the 35-45,000 extra pigs that are in the process of being culled due to rising feed costs and lack of processing capacity and this is resulting in extra demand for spot feed barley.

The old crop malting barley market is still very firm due to brewers’ beer sales going well and subsequent demand for more supplies from maltsters.

With high fertiliser prices and current prices for 2022, with new crop brewing and distilling barley at just over £200/tonne, this might be an option for those who have not yet bought their fertiliser at this time and would help to reduce their amount of its use.

Looking back at the 2021 harvest, the average GB nitrogen content was 1.49% – the lowest level in the AHDB’s historic data going back to 1977. The closest comparative year was 2015, when the average nitrogen content was 1.52% and the Scottish nitrogen content is lower than in England due to requirements from the distilling market in Scotland.

Winter barley nitrogen averaged 1.57% and specific weights for spring barley averaged 63.0kg/hl and 64.8kg/kl for winter varieties.

The AHDB Early Bird Survey is forecasting the UK wheat area up 1.3% for 2022 to 1.81m ha and higher than the 10-year average. The estimated 2022 winter barley area is also up 2.8% to 415,000 ha, again higher than both the five and 10-year averages.

Spring barley is expected to be back 7.7% year-on-year to 688,000 ha, which would be the lowest since 2016, but this could change if prices remain strong. The oat crop looks set to fall by 5% to 189,000 ha, which is just above the five-year average and in terms of alternative break crops, other oilseeds are expected to fall by 6.7%, as are pulses, down 5.1% to 235,000ha, which would be back to 2020 levels.

Total US maize production was increased to 382.59m tonnes due to better weather allowing the maize harvest to be now 91% completed and farmers reporting high yields.

Argentina increased its maize planted area and production to 54.5m tonnes, while Europe has increased its production to 67.85m tonnes. This resulted in global maize ending stocks of 274m tonnes, of which China holds 210.68m tonnes having produced 273m tonnes themselves.

Global maize production is now estimated at 1.212bn tonnes, demand has increased but still not offsetting production increases.

UK maize imports for September were estimated at 69,100 tonnes, taking the season to date total to 316,000 tonnes, down 51% for the same period last year.

The UK oilseed rape market continues to remain firm with rape close to crushing facilities making £600 per tonne, plus oil bonuses for old crop stocks. There was a £15 per tonne drop earlier in the month but due to Chinese requirements, along with potential demand from the energy sector and surging inflation rates (the UK is now at 4.2% and US hitting a 32-year high at 6.2%) all this has been keeping prices strong.

UK rapeseed imports for September were estimated at 145,800 tonnes taking the season to date total to 348,800 tonnes, which was up by 168% for the same period last year.

The recent USDA report indicated that global rapeseed production is virtually unchanged at 67.5m tonnes, compared to 72.7m tonnes last year. A surprise was the reduction in soya production, down to 120.43m tonnes, instead of an expected increase.

UK wheat futures recently hit a contract high of £233.50/tonne for May, 2022; November, 2021, reached £223.40; and November, 2022, new crop wheat hit a contract high of £205, breaking the £200 per tonne barrier for the first time.

Price support is coming from Russia’s plan to impose more export restrictions and increasing export taxes if international prices continue to rise.

UK wheat imports for September were estimated at 154,900 tonnes taking the season to date total to 626,900 tonnes which is 16% down for the same period last year.

Our wheat opening stocks for 2021-22 are estimated to be the lowest this century at 1.42m tonnes and with provisional production put at 14.02m tonnes, this would indicate that the UK needs to import some grain this year to balance the books. USDA is estimating we will need to import 2m tonnes, compared to the AHDB estimate of 1.7m tonnes.

The UK ex-farm spot price for wheat – according to the AHDB corn returns price survey which dates to January 1990 – reached near record levels at £214.70/tonne, which is the highest price since December, 2012, and ex-farm UK bread wheat averaged £255.40 and as high as £263.50/tonne in the North-east of England.

Recently, the premium ex-farm bread wheat had over UK feed wheat hit £40.70/tonne, which was £34.70 more than at the start of the marketing year.

Results from last year’s harvest showed only 20% of UK flour millers' Group 1 varieties reached specification, which was 20% down from 2020. Protein content for Group 1 samples averaged 13.2%, which slightly up on last year and the average specific weight of 75.4kg/hl was the lowest since 2012.

Global wheat exports are now forecast at a record 203.2m tonnes due to higher exports from the EU, India, Russia and Ukraine and will lead to projected global ending stocks tightening further.

End wheat stocks are now forecast at 275.8m tonnes which is below forecast expectations which saw prices firm once again and world wheat stocks are estimated to be down by more than 12m tonnes from last year.

The USDA cut its US export estimate by 400,000 tonnes to 23.41m tonnes leaving wheat stocks of 15.87m tonnes which is only half of US domestic demand.

Paris wheat futures went above €300/tonne recently as Russia announced another export quota, separate from the existing export tax, from February 15 to ensure the country maintained sufficient domestic supplies. This will remain until June 15, 2022.

Further supply restrictions from Russia could push additional export demand to the EU and Ukraine where the rate of current exports is not sustainable and will push export demand to the US and this will result in price rises as we have already experienced.