Poor weather has prevented UK farmers from sowing 30% of
winter crops, Origin Enterprises said, amid growing fears for this year's dismal
conditions having knock-on effects on 2013 and potentially 2014 harvests too.
Origin Enterprises, the owner of the Agrii agronomy chain,
said that "approximately 70% of target arable [planting] has been completed to
date in the UK", below a figure of 100% usually by now.
The estimate represents one of the first of the extent of
the delays caused by the rains which, having given the UK its wetter summer in
a century, have remained to hamper autumn field work too.
Currently, there are 210 flood warnings and 300 flood alerts
in England and Wales thanks to fresh storms which gave many areas more than two
inches of rain over the weekend, with three inches still forecast for northern
Agrimoney.com research two weeks ago indicated wheat sowings were 60% complete. The HGCA crop bureau is expected next month to unveil an initial sowings report, with farm ministry data not expected until 2013.
The "sustained period of unseasonably wet weather" had "significantly
impacted [the] winter planting programme", forcing farmers to consider sowing
outside the normal seeding window, or delaying until the spring, Origin said.
"Farm management plans are now being adapted to extend
autumn planting where weather and soil conditions allow along with a switch to
spring 2013 cropping," the Irish-based group said.
The lower yields fostered by late-sown crops, and inherent
in spring grains and oilseeds compared with autumn-planted peers, is also
raising concerns of another below-par harvest in 2013, after a 2012 result
which saw wheat yields at a 20-year low, and bushel weight come in at the lowest
"And even 2013 might not be the end of it," a UK grain
trader told Agrimoney.com.
"If farmers plant something in the spring like linseed which
is not harvested until well into the autumn, and there is another poor year for
autumn sowings, the damage from this summer could carry on into 2014 as well."
Farmers hold fire
Origin said that while it saw "good sales" of agronomy
services and seed applications in the August-to-October period, volumes of many
inputs, such as fertilizers, were "lower", with farmers delaying purchases
closer to the timing of application.
Nonetheless, the group's revenues from its core agri-services
operation rose 11.2% to E351.2m, with its Polish Dalgety agronomy operation
performing "very satisfactorily" and feed sales in Ireland being encouraged by
limited on-farm fodder supplies, following a poor 2012 summer.
And the group forecast a boost to its performance ahead from
the UK delays, as farmers catch up on sowings in the spring.
"The challenging weather conditions experienced by primary
producers to date will lead to an increased level of seasonality in the 2013
financial year for our agri-services business as a greater weighting of crop
planting activity is expected to take place in the spring period," the group
The statement was termed "in line" by Dublin broker NCB, which
restated a "buy" rating on Origin Enterprises shares, saying the group had "good"
long-term growth prospects.
"We believe Origin has significant opportunities to grow
market share and revenue per customer in the UK, but also has significant
opportunities to recreate its Agrii business model in other European markets,
particularly in Eastern Europe," NCB said.
"While the stock deserves to trade on a discount due to its
lack of liquidity," being 69% owned by foods group Aryzta, "we believe it
continues to offer value".
Rival broker Davy restated an "outperform" rating on the
shares, which recovered early losses to close at E4.20 in
Dublin, unchanged on the day.