Sector trends

Heading into an autumn of change

With the new season comes rampant inflation, uncertain macroeconomics and more potential shifts in government support policy, leaving the sector to clear a fresh path to growth.

If we were to list the market drivers over the past two years, they might sound slightly far-fetched – an unexpected and unwarranted war, a global pandemic, an energy crisis, a lurch towards global recession, as well as government politics relentlessly grabbing the headlines. If we were playing “black swan event” bingo, we would surely have won the jackpot by now.

So, as ever, the question is: what can we do about this? Farm businesses are largely sole traders and small enterprises, and, again, for the most part are buffeted along in the winds of global trade patterns. Unable to set a price but taking all the risk and volatility that commodity markets bring.

There is, as ever, no one-size-fits-all answer to this; the magic button remains elusive. However, the power of our relationships, networks and willingness to discuss is a crucial link that binds us together and creates strength in our businesses.

Sharing information is key

Open communication between farm businesses, their banks, advisers and peers is a crucial method of navigating this change. Taking in as much information as possible is imperative to making effective business decisions.

Therefore, we continue to publish and update our Agri-Market Outlook. Despite the uncertainty and change, there is a need to set a baseline in what we think is going to happen to the supply and demand of our domestic agricultural commodities.

This is the aim of our outlook: to set the foundation of knowledge that can then be built upon through engaging with other parties and data to make business decisions that set you on a sustainable path through this challenging time.

AHDB Agri-Market Outlook highlights


  • British milk production is forecast to finish the 2022/23 season 0.8% below last season. This has the potential to increase to up to a 1.7% decline, depending on the severity of cash-flow pressures this winter.
  • Input price volatility, uncertainties around milk prices, and labour shortages will discourage most farms from pursuing yield growth or herd expansion.
  • Milk prices are high but are only just keeping pace with rising production costs.
  • China’s oversupply may limit import demand for the remainder of the year, affecting global product pricing.
  • Low economic growth and food price inflation will weaken demand, potentially limiting further milk price increases.



  • Beef production is expected to be up 2% for 2022, bolstered by higher than anticipated cow throughput.
  • Overall beef consumption is forecast to drop by a moderate 4% in 2022, dominated by a slowdown in retail sales.
  • Beef imports are forecast to increase as foodservice demand remains in growth year-on-year.
  • Exports of beef are still forecast to grow, helped by higher domestic production and the tight supply situation facing continental Europe.



  • The 2022 lamb crop is forecast to be higher following growth in the breeding stock.
  • Total sheep meat production is forecast to rebound from last year’s low levels, returning to 2020 levels.
  • Exports are expected to grow 20% compared to 2021, while the recent increase in imports is expected to slow.
  • Domestic demand is expected to drop in 2022, as consumers face pressure on personal finances.



  • A contraction in the breeding herd is expected, leading to a 6% fall in UK pig meat production, strongly weighted towards the second half of 2022.
  • UK demand is expected to weaken slightly as the year progresses, as pre-pandemic trends re-emerge along with wider increases in the cost of living.
  • Export markets remain challenging, with Chinese demand slowing. Although exports had been increasing, higher UK pig prices and declining production may constrain future volume growth.
  • Imports are expected to grow in the second half of year as declines in demand are outweighed by declines in production.



  • This season, domestic wheat supply starts the season as plentiful, though domestic barley supply remains tight.
  • Grain prices remain supported at historically high levels due to tight global supply.
  • Tight global supply is a result of dry weather across key producing countries, as well as the ongoing conflict in Ukraine disrupting Black Sea exports.
  • Input prices, especially fertiliser, continue to rise, squeezing producer margins. Rising natural gas prices push fertiliser costs higher. A weakening pound also makes imports more expensive.
  • A global and domestic recession, and consequent demand rationing, continues to be a key watchpoint for price direction.



  • Domestic rapeseed prices remain historically supported, continuing to follow EU markets.
  • Vegetable oil supply remains a key watchpoint, considering the Ukraine conflict has disrupted global sun oil supplies.
  • Soyabean markets currently look outward in a bearish tone, with a large US crop being harvested and sizable South American crops being forecast.
  • Oil and vegetable oil demand remain key watchpoints for price direction, considering economic performance and concerns of a looming recession.

This article was produced by our partner specialists at AHDB. For more information on the topics covered here, please visit AHDB.

This material is published by NatWest Group plc (“NatWest Group”), for information purposes only and should not be regarded as providing any specific advice. Recipients should make their own independent evaluation of this information and no action should be taken, solely relying on it. This material should not be reproduced or disclosed without our consent. It is not intended for distribution in any jurisdiction in which this would be prohibited. Whilst this information is believed to be reliable, it has not been independently verified by NatWest Group and NatWest Group makes no representation or warranty (express or implied) of any kind, as regards the accuracy or completeness of this information, nor does it accept any responsibility or liability for any loss or damage arising in any way from any use made of or reliance placed on, this information. Unless otherwise stated, any views, forecasts, or estimates are solely those of NatWest Group, as of this date and are subject to change without notice. Copyright © NatWest Group. All rights reserved.

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