Welcome to our collection of items of news and interest from the last quarter.
RPI Summary
RPI overall stood at 0.9% for March 2015, the rate of inflation easing to 0.7% less than when we last reported it for December 2014. Pork was the only commodity showing an increase in rate of increased pricing (1.2%) this time round, the other tracked commodities ranging from -0.9% (beef) to -5.0% (fish).
Versus December 2014, pork again bucks the underlying trend as the only commodity posting an increase with all others falling taking overall RPI with it.
P R O M O T I O N
Food Traceability: Supporting Tools
Understanding transparency is now a fundamental part of the food service industry, with the arrival of BRC7, PAS96. A low cost cloud based transparency platform solution,`Pyramid`, has been launched with collaboration from businesses right across the supply chain industry, including those in the beef and fish supply networks referenced here. It provides users with easy access to a rich wealth of functionality including: supply chain transparency data product level allergen and nutritional content diversity data sustainability measures full certification audit measurement
Paul Marples Authenticate Information Services Ltd
Beef
It’s all going down in the beef sector – cattle slaughtered, cattle demand and ultimately, cattle prices. Data from QMS (Quality Meat Scotland) is showing “a sliding price at the same time as we have a sliding supply,” says its head of economics services Stuart Ashworth adding that slowdown in demand for manufacturing is putting pressure on wholesale prices.
Eblex senior analyst, Debbie Butcher, further states that retail demand for beef has also been “subdued”. Causes cited include: increased carcass weight (boosting beef volumes); the usual seasonal drop in demand (expected to rise again in the summer) and a fall in European meat consumption on the back of the horsemeat scandal. Despite all the above, the QMS remains buoyant about beef prospects looking forward. (Footprint)
Talking of the horsemeat scandal, 26 arrests were made at the end of April as part of an on-going operation by Eurojust (European Union’s Judicial Cooperation Unit). In addition, 800 horse passports were seized together with €37,000 in cash. Let’s hope this is making good progress towards ending a practice we’d all like to see the back of. (Meat Info)
Assessment
Long term beef prices are likely to creep up when surplus in supply adjusts to the slackening demand.
Dairy
The end of an era came upon the dairy industry as the 30-year old EU milk production quota came to its conclusion on 31 March 2015. For some this presents some significant challenges as without any central regulatory framework, unrestrained production could result in a much unneeded price slump. Major companies may be able to manipulate the new playing field to their advantage but the common dairy farmer may, again, be at their wit’s end as they try develop a sustainable business where the price they can achieve covers their cost of production.
The European Milk Board is calling for a replacement tool – Market Responsibility Programme (MRP) – which encourages farmers to deliver in line with the market: under produce to reflect a lower market demand and receive a bonus; over produce and be penalised. Still many challenges to making this work but if it helps UK dairy producers then let’s make it happen.
Perhaps more influential though in this equation is the UK foodservice sector which “yields great power” says Footprint Managing Director Charles Miers and maybe it is here we should look to for greater support for our UK dairy livelihoods. (Footprint)
Assessment
The diary market looks bleak for many dairy farmers entering another sustained period of low prices giving them no option to create efficiencies and cut production costs in order to survive. Increase in the demand for whey in sports drinks looks to be the only good news on the horizon.
Pork
The supply of pork continues to grow and demand is not catching up according to latest AHDB (Agriculture and Horticulture Development Board). Production data shows that the breeding herd was relatively stable during 2014 and this will continue into the near future. Clean pig slaughterings are forecast to carry on around 3% per year with growth in meat production likely to be similar.
Despite a significant gap between UK and EU prices (above 20p/kg) imports into the UK during 2014 were only slightly higher than 2013 – demonstrating that our discerning UK pork buyers remained committed to buying local (UK) pig meat – and so say all of us! The weakness of the pound versus the Euro will continue to hamper exports but all in all, unless demand picks up, supply will be plentiful and prices will under pressure.(BPEX)
Assessment
Producers in the UK continue to receive weak prices indicating that the processors are creating the increases in pricing.
Fish
Piracy is not something we normally hear about other than cargo hijacking in distant foreign climes or Johnny Depp in one of his Caribbean exploits but new guidance is aiming to keep pirate fishing out of the UK supply chain.
Aside of the economic losses of as much as £15.3 billion a year, illegal “pirate” fishing also damages the environment and human rights and the new guidance (by the British Retail Consortium, Environmental Justice Foundation and WWF UK) offers advice on risk assessment and mitigation to retailers and suppliers in order to bring an end what is a long term threat to the oceans whilst building up legal and sustainable fisheries.
Eight key recommendations relate to increased transparency and traceability of supply – absolutely we say.(Guardian)
Assessment
We encourage the reporting and education of the underlying traceability in fish by highlighting the fragile species during our reviews.
Cereals
For farmers, with more than 40 winter wheat and 35 oilseed rape varieties alone, selecting the right variety can prove difficult.
However, this decision is set to become easier with a new online tool from HGCA which will provide regional variety trial data to aid farmers identify the most promising options for their farm. Comparisons can be made on a range of parameters that will enable farmers in an intuitive and visual way to make more informed and confident decisions on which crops to plant – showing technology and quality information can make a real difference in the ‘real world’.(Farmers Weekly)
Assessment
Recent controversy on seed varieties has impacted planting and destabilised pricing.
Other Markets
Potatoes … Regardless of your viewpoint, GM crops will continue to make the headlines for some time to come and it is the humble potato that is the latest product to enter the GM pipeline this time round. Researchers at the Sainsbury Laboratory are the “very early stages” of developing a “super” potato with greater resilience to blight and disease, environmentally friendlier and more healthy. The usual arguments will abate but maybe support for GM may increase if a portion of triple cooked chips can become part of our healthy 5 a day! (Farmers Weekly)
Eggs … Some 32 million eggs were eaten each day in the UK during 2014 equating to some 11.7 billion for the whole year. Sound like a lot? Well, consumption is on the up, driven to a large degree by the increasing recognition of its health benefits and its popular inclusion in quoted healthy diets and major slimming plans. After a consistent decline from the 1960s (halted by the British Lion Scheme in 1998) consumption has now returned to levels last seen before the Salmonella crisis in the late 1980s – welcome back!(Egginfo)
Chicken … We’ve highlighted the use of insects as a source of protein for us humans but it is now being heralded as an equally good food source for animals in Britain – particularly focusing upon chickens, pigs and fish. It’s still early days, with research and trials being undertaken and, with it currently being illegal under EU law to feed insects to animals, laws would need to be changed. However, an interesting development that will aid EU self sufficiency in crop protein – not so good for the insects though. (The Poultry Site)
Lamb … There is a growing appetite for home-grown food according to the NFU with recent polls showing that 85% of shoppers want to see supermarkets selling more food from British farms – good news. Against this backdrop the union wants the UK major retailers to leverage this demand and “show serious commitments to sourcing new season British lamb”. NFU livestock board chairman Charles Sercombe also hopes the lamb will be “Red Tractor-assured British lamb”, further underlying the quality and provenance of British produce to the British public. (Meat Info)
Comment
Now the election campaign results are out, we look forward to a more decisive trading period ahead of us. British food and agriculture remains at the heart of the Government food agenda as the NFU continues to strive to differentiate the high quality of British Agricultural practices compared to the rest of the world.
Michelin starred chef, Tom Kerridge, certainly hopes so, based upon his belief that Britain is too reliant on imported foods and fails to support its local farmers and their communities. Mr Kerridge, who ‘walks the talk’ by regularly using between 85-90% British produce at his two restaurants, cites Britain as being “only at something like 60% self sufficient”, a figure likely to drop “to 53% in the next 25 years” – a “shocking” statistic. With food and farming now worth £103bn a year to the UK economy, employing one in eight of those in jobs in the UK, and exports at nearly £19bn – Mr Kerridge believes the industry provides a golden economic opportunity (Telegraph).
Food and drink lies at the heart of all our daily lives … but why should it not lie at the very heart of our nation’s government, culture and success? As we regularly report, we are all looking more closely at what we eat, both in content and provenance … why do we not embrace more the quality, value and diversity of the Britain’s produce and give its producers the support it needs to thrive, return a living, and feed the nation’s stomach and its economy – at home and abroad. What’s not to like!
