Thursday, 12 June 2025
- Nov-25 UK feed wheat futures settled at £177.30/t yesterday, up £0.45/t from Tuesday (when the contract closed at a new low).Dec-25 Chicago wheat futures also recorded marginal gains yesterday, while for Paris milling wheat, the Dec-25 contract remained unchanged.
- While yesterday estimates for Argentinian wheat output for 2025/26 were trimmed by the Rosario grains exchange, improved crop prospects in the US and Russia continue to cap gains.
- We also saw sterling weaken against several currencies yesterday (including the US dollar and euro) in anticipation of the spring spending review. In turn, this gave some slight support to UK markets yesterday – more on the impacts for UK growers of the spring spending review below.
- Nov-25 Paris rapeseed futures closed at €489.25/t yesterday, down €3.00/t on the day. Rapeseed followed US soyabean markets down, which were weighed on by uncertainty around a US-China trade deal.
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As anticipated, Defra will see a 2.7% reduction in overall spending over the five-year review period, 2024/29. Despite this cut, Defra is allocated a total funding of £7.4 billion for 2028-29, with a strong emphasis on sustainable farming and nature recovery. The settlement also includes substantial investments in flood defences and digital transformation.
- Total funding: £7.4 billion in 2028-29
- Capital funding: £16 billion over the spending review period
- Sustainable farming and nature recovery: £2.7 billion per year from 2026-27 until 2028-29
- Flood defence projects: £4.2 billion from 2026-27 to 2028-29
- Digital service improvements: Over £300 million
Implications for Levy Payers
Farmers will benefit from an extra £2.3bn Farming and Countryside Programme and up to £400m from additional nature projects. This includes increasing support for ELMS from £800m in 2023/24 to £2bn by 2028/29.
There remains some uncertainty regarding the distribution of these funds, AHDB will be closely monitoring developments in the coming days and weeks. Once details of the additional spending on Environmental Land Management schemes (ELMs) are released, we will continue our analysis to determine how these schemes can best benefit farmers through specific actions.
Key areas of focus will include:
- The allocation of the £2.7 billion per year for sustainable farming and nature recovery, and its impact on levy payers.
- Analysis of how headline payment rates will translate into income for farmers.
Additionally, given the spending review’s focus on security, health, and economic growth, we will explore the role of agriculture in these priority areas. We aim to understand how a coherent and integrated land use framework, food strategy, and 25-year farming roadmap can support the government’s overarching economic priorities.
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