Analyst insight: BPS area lower than June survey for major crops

• Old crop UK feed wheat futures (May-23) closed yesterday at £220.00/t, down £2.50/t from Tuesday’s close. New-crop futures (Nov-23) fell just £0.75/t over the same period, to close at £223.75/t.
• Domestic new crop futures are retaining a premium over old crop futures once more.
• UK wheat followed US and European markets down yesterday, on expectations of the renewal of the Black Sea Initiative (Ukraine export corridor), as talks take place to extend the deal. Ample cheap Russian supplies on the global market also continue to pressure prices.
• Paris rapeseed futures (May-23) fell €6.25/t yesterday, to close at €513.25/t. This followed pressure in nearby brent crude oil futures and Malaysian palm oil futures (Jun-23).
• Chicago soyabean futures (May-23) closed up $0.83/t yesterday, to settle at $557.62/t.

This morning, Defra and the Rural Payments Agency (RPA) released the total area of land claimed under the Basic Payment Scheme (BPS) for 2022 in England.

Since the RPA started publishing the BPS area data in 2018, there has been questions around which area information is more accurate – the BPS area or the data collected in the Defra June survey? With the BPS having a higher number of claimants than the sample size of the June survey, it could be argued that the BPS area is more accurate. That said, it is important to note that there are limitations and differences between each source. Furthermore, following consultation with industry, Defra do now use the BPS information to inform the June survey.

Below is a table which shows the 2022 BPS area results, compared with data from the 2022 Defra June survey.

While the difference between the two datasets is relatively small for the total agricultural area, there are larger differences amongst the individual crops. For wheat, the difference between the June survey and the BPS area data is larger than in 2021 at -2% or -34Kha. What would this area change mean (if it was the most accurate source) for production this season?

Taking the BPS area for England and multiplying it by the Defra England average yield for wheat (2022), would lead to a production figure of c.13.975Mt for England. Adding that to the production data for Wales, Scotland and Northern Ireland would lead to a total UK production figure of 15.247Mt. This is around 293Kt less than the official Defra figure of 15.540Mt. With questions around the size of this season’s crop, could this be a more realistic output? It’s important to note, this calculation uses the Defra yield (which is derived from the June/production surveys), but it does give an indication of a possible production scenario.

The total barley area in England is also 2% (19Kt) lower than the June survey area, driven by larger swings in the spring barley area. Using the same principle to calculate a production scenario as used for wheat, 2022 barley production comes out at 7.272Mt, which is around 113Kt lower than the official Defra figure of 7.385Mt. The BPS oat area is 7% lower than the June survey, which again could see (using the same method as above) a production figure of nearer 950Kt rather than 1.007Mt.

Its important to reiterate that neither dataset is 100% accurate and there are a number of limitations with both. The production scenarios above, give a rough indication of the possible differences, if one or the other data source was used. With the BPS soon to be no longer, I would be inclined to accept the limitations of the June Survey, given the amount of back data that is available too. That said, with the lack of a full June Census in 2020, the accuracy of the data does come under further scrutiny. In a time where accurate and timely information has never been more important, AHDB will continue talks with industry and government to ensure accurate information is available. 

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