Thursday, 11 February 2021
AHDB Market Intelligence work in partnership with Defra to produce the domestic cereal balance sheets. The balance sheets combine Defra production and stocks data with HMR&C trade data and AHDB usage and stocks surveys.
The domestic balance sheets are a diagnostic tool to show the supply and demand balance of grains in the UK. By looking at the usage, stocks and supply of grain, all market participants can have a clear understanding of the under, over or tight supply of the domestic grain market and make informed business decisions as a result.
The official balance sheets are produced in November, February, May and September for a July-June marketing year. AHDB also produces a non-official early balance sheet in October to give a more responsive view of the season’s supply and demand.
What data goes into the balance sheet and who produces it?
- The opening stock figures are a combination of on-farm stock surveys from Defra and devolved governments, plus a survey of commercial stocks by AHDB. The end-June stock surveys calculate the ending stock of one season; this is also the opening stock of the next season.
- Defra produces the production figures used in the balance sheet. This figure is derived from the annual Production Survey that calculates production and yields, and the June survey, which calculates the area.
- HMR&C provide monthly data on imports and exports. This information is reported two months in arrears e.g. February trade data is reported in April. As such, the final balance sheet of a season is reported in September after the June trade data is released.
- AHDB do monthly surveys on the usage of grains in the animal feed and human and industrial sectors. This covers flour milling, brewing, malting and distilling demand. Animal feed used in integrated poultry units is also reported.
Before each balance sheet is produced, AHDB convenes a Working Group to discuss industry trends with stakeholders. The discussions inform assumptions and decisions in the data production. This is an open group of industry participants. If you would like to take part, please email David.Eudall@ahdb.org.uk.
Over the past year, the data used to produce the balance sheet has led to a large residual in wheat. This residual tonnage cannot be attributed to a single use or stock. The data also led to a deficit, where there is not enough total supply to cover total usage in the July-June period.
It has been clear that there are some questions over the accuracy of data used. The production and on-farm stocks data has faced most questioning. This is in light of the small samples used in these surveys and inaccurate completion of the surveys.
At the AHDB Balance Sheet Audit Function Group meeting on February 4th, AHDB agreed to publicise the ongoing work to ensure accuracy in industry statistics.
Our first steps to more accurate data
The following actions will improve the accuracy of production estimates for future balance sheets. AHDB is working with Defra and industry to continually improve the data produced by, and for, the industry.
The below actions and pathways to development were agreed as part of the Audit Function Group meeting on February 4th.
- A full agricultural census is planned for 2021, which will review cropping areas as at 1st Defra is exploring the possibility of sharing the relevant census questions with AHDB ahead of the survey to review wording and context.
- AHBD has offered to assist with the future development of the Production Survey as required.
- AHDB will support Defra in their promotion and communication of the census. This will ensure all are aware of the benefits of supplying accurate data into the census.
- Promotion of census: May-June 2021
- AHDB is undertaking exploratory talks with Defra and other stakeholders on the potential use of satellite technology to measure cropping areas.
- These discussions will start in February. Developments will be reported back to the industry as appropriate in the coming weeks and months.
- Initial discussion: February 2021
- Report back to Audit Function Group meeting: March 2021
On-farm stock survey
- Defra have doubled the sample size of the English on-farm stock survey for February and June. The sample size has increased from 2,000 to 4,000 to increase accuracy.
- AHDB has supported Defra with the content of the survey form to help users complete it accurately.
- AHDB will also provide a communications boost during the survey period, starting from 25th This is to raise awareness of the importance of the survey and the need for accurate information.
- AHDB will continue to assist Defra for the June on-farm stocks survey.
- February stock survey communication: Feb 25th onwards
- June stocks survey review: May/June 2021
- June stock survey communication: mid-June onwards
- Defra are leading discussions with HMR&C over the possibility of weekly trade data and will update in due course.
- Update expected late-Feb
February ’21 Balance Sheet
- AHDB will remain impartial in its analysis of the balance sheet and why variances, such as residuals and deficits, exist.
- AHDB will provide more communication around the context of the balance sheet, not just the data. This will make it be more accessible and easier to understand by users who view the data at a glance.
Frequency of balance sheets
- AHDB have explored the possibility of moving to a more regular balance sheet production, but are wary to do so until we can get a consistent, accurate picture of the data.
Accuracy and context of usage statistics
- AHDB will conduct a gap analysis of the usage statistics produced to answer specific questions from industry relating to statistics not representing current market conditions.
In order to keep industry aware of the progression in these actions, AHDB will hold further Audit Function Group meetings in March and May to discuss priorities. Where appropriate, a public update will be made after each meeting.
If you would like to discuss this information in any more detail, please do get in contact.
David Eudall, Head of Market Specialists (Arable)
07823 789 910
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