2023 SFI applications to open from August: Grain market daily

• Nov-23 UK feed wheat futures closed at a near two-week low yesterday, slipping back below the £200/t mark to settle at £199.00/t, down £8.25/t from Monday’s close. The UK wheat market followed the downward trend in US and Paris markets.
• Global grain markets were pressured yesterday by a few bearish factors. Firstly, much needed rainfall is forecast in key US maize-growing regions, which has alleviated some concerns over crop conditions. Also, concerns over political uncertainty in Russia have eased somewhat. Following the military coup in Russia over the weekend, the Wagner group have now been exiled to Belarus as part of a supposed deal made between Putin and the head of the mercenary group. Furthermore, following some concerns over Russian production for the coming season, an ample Russian wheat crop was forecast by the EU’s crop monitoring service on Monday, easing concerns over supply. Russian wheat output has been estimated at 86.7 Mt for 2023, down 17% on the year, but 4% higher than the previous five-year average (European Commission MARS Bulletin).
• Forecast rains in the USA have added further pressure to US soyabean markets, and in turn have further weighed on rapeseed prices. Nov-23 Paris rapeseed futures closed at €441.00/t yesterday, down €7.75/t from Monday's close. Brent crude oil markets also closed down yesterday, which is likely to have added pressure to rapeseed prices.

Last week, Defra announced that the Sustainable Farming Incentive (SFI) 2023 will be launched in August. The SFI scheme has been updated to provide farmers with more flexibility and make the process more streamlined.

SFI 2023 will include actions rather than standards, and farmers can pick and choose which actions they get paid for depending on what works best for their business.

There will be 23 new actions that cover the following themes:

• Soil health
• Moorland
• Hedgerows
• Integrated pest management (IPM)
• Nutrient management
• Farmland wildlife
• Buffer strips
• Low-input grassland

In addition to the new actions, there have been further updates to the scheme including:

• Management payments will be available to cover participation costs
• Shorter agreement lengths that do not require landlord consent to make the scheme more applicable to tenants
• SFI actions can be combined with Countryside Stewardship options in the same parcels or areas of land

It's worth noting that the payment rates and set up for the existing SFI standards remain unchanged.

The SFI scheme was launched last summer (2022). We published in-depth analysis to help levy payers make more informed, evidence-based decisions.

Following this announcement, we will be incorporating the latest information on the scheme to analyse the impact on farm businesses using our model farms.

Defra have also published the SFI 2023 handbook which contains information on the different actions.

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