Welcome to our quarterly newsletter.
At 1.6%, annual RPI for Dec 2014 registered a 0.40% fall during the last quarter – the lowest quarterly drop since Oct 2013. Versus this time last year, the figure is some 1.1% lower (Dec 2013). Of the key commodities tracked, 3 showed a fall, whilst the others posted increases.
The big picture for the annual RPI position of 2014 versus 2013 shows the least overall movement throughout the two years and led a gentle decline down from 3.3% (Jan 2013) through to its Dec 2014 figure of 1.6%. For the commodities however, their paths were far more volatile in 2013 and this continued into 2014. However, having started 2014 with almost 11% separating the annual RPI of highest and lowest commodities the year drew to a close with all commodities appearing to converge within only a 2% margin separating them all.
With potential deflation on the cards for 2015 (underpinned by low oil pricing) we forecast low inflation overall with spiking on commodities under pressure through unfavourable climates, political unrest or adverse exchange rates.
Insects and Bugs:
A ‘bushtucker trial’ or a protein for the future …
Entomophagy (the eating of insects) has been around for tens of thousands of years. Four fifths of the global population already consume insects as part of their diet. With over 1,900 species certified for human consumption, why is this valuable resource not being utilised to its full potential in the west?
UK agriculture is currently responsible for 10% of the UK’s green house gas emissions and if it is to make a difference – play its part – it needs to instigate change and actively reduce its carbon footprint before potentially catastrophic events occur.
As a human feed source they are packed with vitamins, minerals and protein. For example, crickets have a feed conversion rate of 2:1 with beef cattle at 8:1. Mopane worms are made up of 60% protein, while a species of termite in Venezuela contains 64% protein. Mealworms are close to beef when it comes to protein content, and locusts have a mighty iron content of 20mg/100g while beef has 6mg/100g.
Even if they don’t tickle your taste buds, consider them as a protein source. They require significantly less room to farm and lower inputs i.e feed and water, while reproducing at high rates. With agriculture entering un-chartered territory as it adapts to climate change, we need to explore the most innovative and ambitious ideas such as utilsing insects as a source of protein for both human and animal consumption.
Robert Yardley, Oxford Farming Conference Scholar
The Department for Energy and Climate Change encourages us to eat less beef (and lamb) in order to free up land for habitats that will absorb those harmful greenhouse gases – thus making a healthy contribution to saving the planet. The maths is simple – reduce the demand for agricultural land and increase available land for forestation. The question is, by how much are we prepared to cut back on our love of a good steak (or chop) on the promise of a better long term future? (Daily Mail)
Meanwhile, EBLEX continues to support English beef and sheep farmers with grants awarded by EBLEX Better Returns Programme (BRP). Groups of three or more farmers can apply for up to £5,000 towards introducing or evaluating new technological developments that maybe strengthen best practice or could lead to better returns. (Eblex)
After a turbulent 2014, a more stable 2015 ahead is predicted although pricing for the immediate term is still difficult to call.
It’s no secret that it is a tough time for UK dairy farmers at the moment with the price of raw milk down by about a third over the last 12 months to just over 20p a litre. For many farmers, this is below the cost of their production meaning a reliance on European Union subsidies to stay afloat. With the number of UK dairy farmers having halved since 2002 (to less than 10,000) the landscape is looks decidedly bleak for the future of domestic supply of milk. (Financial Times)
As if this were not enough, a financial crisis at the dairy co-operative First Milk meant they were forced to delay payment to more than 1,000 British farmers for two weeks during January (2014). Whilst a co-operative spokesman argued it would put the business and its finances on stronger foothold – it would seem the action would clearly be conversely unhelpful to the plight of the farmers. (BBC).
The bewildered Dairy Farming community ask “Why is a bottle of water achieving a higher price in a supermarket than a bottle of milk?”
Don’t expect any significant change on milk pricing over the next quarter whilst supply comfortably meets demand. Any upward is not foreseen until the second half of 2015.
There’s an interesting story behind the continuing fall in pig prices – 20p per kilo since last summer (2014) – highlighted by the National Pig Association’s chairman, Richard Longthorp. On the downside, this decline means a reduced return for the producers. However, on the positive side, pork represents excellent value for customers and retailers are keeping their commitment to British pork following the horsemeat scandal (now 2 years ago), particularly commendable in the current climate of Russia’s meat embargo.
This commitment underpinned by pork being “a quality, farm-assured product, with a short, transparent supply chain”, a welcome relief from the pre-horsegate days of sourcing meat solely on price, regardless of origin – the worst kind of “short-termism”, he said. (NFU)
With supply high and the Russian embargo still in force there is immediate change anticipated to the current lower pig pricing.
A new deal on fishing quotas and industry rules, reached in Brussels and welcomed by both Scottish and UK governments has not been so well received by the Scottish Fishermen’s Federation. They say the new constraints around offloading unwanted fish into the sea are “without a sensible legal platform” and contradict existing regulations on landing fish. Under the new rules, fishing boats will be obliged to land unwanted species caught in their nets and, from January this will include species such as herring and mackerel, and then a year later, cod and haddock.
Clearly, the overriding goal must be to ensure that whilst adhering to agreed fishing quotas, fish stocks are preserved and not wasted (BBC)
Salmon prices likely to rise during 2015 due to bad weather in Norway but little else to impact prices significantly during the next quarter.
Eggs … “The great British public are missing out on a premium seasonal product” says Jamie Oliver, speaking about the smaller eggs laid by the young layers, or pullets, whose eggs are third smaller than those most shoppers buy in supermarkets. “They may be little but farmers say they’re the tastiest you can get.” says Jamie. Will the public be swayed and a revolution be started? (Express)
Chicken … Chicken came in for some unwelcome publicity during the Autumn of 2014 when the Food Standards agency shared the results of six months of testing for the potentially lethal food-poisoning bug campylobacter, on samples of skin. Not pleasant reading with eight out of 10 fresh chickens bought from UK supermarkets showing contamination. Let’s see how the industry responds to prevent consumers voting with their purses.
Lamb … If the lamb sector is to maximise its returns, it needs to drive an enhanced meat eating quality throughout the supply chain and fully utilise the whole carcass, developing new and innovative cuts says Dr Phil Hadley, EBLEX head of supply chain development. (Eblex)
In other news …
There’s a history of weird and wonderful names amongst the stars – Zowie Bowie (David Bowie), Moon Unit (Frank Zappa) to name but two – but of late, it would seem food is playing a bigger part in the decisions of today’s celebrities in naming their offspring. Apple caused quite a stir when Chris Martin and Gwyneth Paltrow landed on this as a name for their baby girl – followed shortly by Clementine, daughter of Claudia Schiffer. Olive has also proved popular (Drew Barrymore and Sacha Baron Cohen) – likewise Honey (middle names for both Jamie Oliver and Kate Winslet). However, the French have taken a more legislative step and deemed some food items not worthy of name status – “Nutella” and “Strawberry” – we say quel dommages!
It was a way ‘back in the day’ when the phrase, ‘the only constant is change’ first surfaced and this is none more applicable today than to the food landscape. Whether the physical, agricultural landscape, or the attitudinal landscape of how we view the food we eat, where it comes from and how it is produced – the whole world of food is constantly changing.
We have entered a period of ‘peak food’ where the supply of a significant proportion of our traditional staples are slowing in growth and losing momentum (The Independent). Many of these crucial sources of food having peaked during a relatively short period (1988-2008) and at a time when the population is blossoming at its accelerating rate (9 billion by 2050!).
Against this backdrop, we continue to develop and look at new ways of farming, boosting and protecting our crops (GM for example) but also examining and challenging these production methods together with their environmental impact – in fact, the whole supply chain is being scrutinised and evaluated. Add to this the continuous, and often opposing dictates on diet – what is good for us and what is not – it is interesting to ponder where all this will end? Traceability, Transparency and Integrity are the values upon which PIP approach all our supply chain research.
As individuals, we are unlikely to save the planet – but together, we can make a real difference. In addition, within our roles and businesses we all have a responsibility to delivering on our individual cog in the food chain. What does this mean? This means doing what we can to protect what we have; exploring sustainable alternatives; informing all of the choices they have (and their impact); to influence decision makers where we feel the cause is overwhelmingly advantageous.
At Partners In Purchasing we strive to get the balance right between the necessity of the now (costs, margins and budgets) and the long term goals (environmental and planetary survival). Challenging but exciting!