Comment – a few things to watch this week

Yours truly likes to think he keeps his finger on the pulse, which does have its positives and negatives..

Looking across the channel towards Europe can throw up some interesting things, have you heard about CBAM ? It’s the Carbon Border Adjustment Mechanism which the EU has now implemented. This means that third countries have to pay a carbon tax on the embedded carbon at the point of production. In practice, particularly for energy intensive products, think steel, aluminium and fertiliser, lots of EU imports are no longer cheaper than the home produced equivalents. Here’s a decent explainer.

All well and good you say, but did you know that as of the end of January the enforcement of CBAM has reduced fertiliser imports to the EU by some 80%. As you can imagine Europes farming unions are starting to express their displeasure at the prospect of  a very low yield at harvest on the back of a fertiliser shortage. Remember the EU hasn’t got the production capacity to fill this gap. On the strength of this news, yours truly immediately ordered both bags for this year. I suspect that ‘alot’ of fertiliser will be making its way south across the Irish border shortly.

The other piece of cheerful news is that the ‘Dynamic Alignment’ agreement between the UK and the EU means that we (the UK) will have to align all our crop protection products to those approved for the EU, and not vice versa, this will have profound implications for UK growers as several key products are approved for UK use but not EU, and these would automatically be removed as the agreement comes into force. Read here for more.

By way of balance one forward looking piece of research reckons that the world market for ag equipment will reach $689 Billion by 2035. It also says that the market is stuck in a two speed system with the ‘hardware market facing headwinds from tariffs and high interest rates’ whilst simultaneously ‘the software and retrofit market is enjoying a golden age’. Go figure.

I woke up to snow this morning, so it’s time to go and drag in some firewood. This is fortunately not subject to a carbon tax, and is homegrown.

Stay warm this week.

Andy