Episode 5: War in Ukraine and UK food independence
The war in Ukraine is affecting the global food supply chain and has generated a furious discussion on food security. Britain is no exception, with policy makers and food industry executives urgently questioning the UK’s dependence on food imports. But how realistic is change? Channeling the views of a wheat farmer, a livestock expert and a food trader we look at the state of UK agriculture today. We discuss the impact of high input prices on the industry’s resilience, debate the likely impact of short term pressures on the longer term sustainability agenda and point out some of the choke points in British agriculture that constrain its productive scalability. A very wide-ranging discussion, set against the dark backdrop of the Russian invasion of Ukraine.
Contributors in this episode
Clive Bailye
Arable farmer. TWB Farms
Mike Soulsby
Food Export and Import, GB Seasons
Rob Daykin
Livestock expert, Daykin Partnerships Ltd
Florian Ritzmann
Florian Ritzmann, FutureFarm host
“Food production has been marginal at best in the UK for too long now. And it’s something that we all need, you know. Everyone panicked when they couldn’t buy toilet roll or fuel was short at the fuel pumps. Well, you know, I dread to think the panic that would be in society if suddenly the supermarket shelves weren’t full, and genuinely I mean, short term - that’s my concern right now. ”
Florian Ritzmann: Hello and welcome to the 5th edition of the FutureFarm podcast.
Since our first recording in October 21, each discussion we hosted has covered food price inflation. But back then, the public’s focus was on home heating cost increases. The spike in agricultural input prices which was causing farmers problems was not immediate enough to make the headlines. The war in Ukraine has clearly changed this. A breadbasket nation has been yanked from the global supply chain, and the problem of food security and food price inflation is now acute all over the world
This discussion is of course going on in Britain as well. Today we first talk about what has changed in the agricultural commodities market. Then we’ll turn to a discussion on food security and what it means for Britain, where some sectors in British agriculture had already been facing severe cost pressure way before to the Russian invasion of Ukraine.
So strap yourself in, I promise you this will be an interesting half hour.
First, I'd like to introduce Clive Bailey. Clive, you're a farmer in Staffordshire. Why don't you tell us what you grow and how you do it?
Clive Bailye: Okay, yeah, so we're combinable crops farm. We're reasonable scale. The crops we grow here - wheat for both feed and milling markets. Oilseed rape, barley - animal feed primarily - grain rye, beans, linseed, and few other bits and pieces from time to time, but that that's the core of what we're growing. All combinable stuff.
Florian Ritzmann: You said wheat right at the outset. You grow both milling wheat and animal feed grade? Is that correct?
Clive Bailye: Yeah. Historically, we have. Current circumstances, again, possibly influencing that decision at the moment, because obviously, the milling wheat has a much higher nitrogen requirement. So the capital involved in getting it to milling and the gamble of aiming for that higher quality wheat is something we're questioning right now in light of the very high nitrogen prices at the moment. So yeah, maybe next year we may look a lot more towards the feed wheat side of things. That's the conversation we're having to make with this kind of changing goalposts-moving scenery of the last few months.
Florian Ritzmann: So the key word being price - wheat prices. Can you tell us what has happened to the wheat price in particular since the outbreak of war in Ukraine?
Clive Bailye: Yeah, it was happening before the war to be honest. The volatility in grain markets in this last 12 month period has been huge. If you were selling feed wheat, for instance, pre-harvest, you would have been in that £150, 160 a tonne kind of range, it would climb steadily post harvest, with various kind of global news of drought and weather events around the world and lower stock figures. So it was climbing fairly steadily around the £200 a tonne mark but then obviously the outbreak of the war in the Ukraine has really spiked that with them being such a critical part of the supply chain, not just the Ukraine, that whole Black Sea region is an area with some of the most important ports in the world, shipping wheat around the world. So it has really impacted the market. Today's prices were £300 - 315 a tonne for feed wheat so we're talking about variability within the last six six or eight months of pretty much 100% difference and that impacts on the profitability of my business massively. How well I farm, what my yields are now, how efficiently we're farming has almost become secondary to to how good a trader I am. Buying my nitrogen at the right time and selling my wheat at the right time can make huge swings in difference to the profitability of the farm to the point where you start to wonder: am I making a living out of actually farming and growing crops now or am I just a trader really in this market?
Florian Ritzmann: I think you're both. Tell me when you say feed wheat is £300 - 315. How much is milling wheat right now?
Clive Bailye: So the milling wheat premiums are normally in that kind of £20 to 30 a tonne premium. What I'm questioning is the extra nitrogen required to get the protein contents and specification for a milling wheat. At the moment the high nitrogen prices you know, nearly £1,000 for a tonne of Nitrogen prices that are being talked about right now, they wouldn't cover the additional nitrogen needed. So the financial case for growing milling wheat this season or next season even are pretty weak right now. The better business decision would just be to grow a large field of feed wheat at lower cost.
Florian Ritzmann: That's interesting. So you think that the business case for growing the wheat that humans need to eat, to make bread with and eat, is still not quite there. Yet at the same time we hear the words food security, and reducing our dependence on imports - but we'll get back to that presumably at the end in a group discussion. As a final question before we move on to our next participant, if you were called upon to grow more wheat this season - how easy is that for you to do? How elastic are you in terms of how much wheat you can produce?
Clive Bailye: Well, we already are trying to maximise our output. So you know, I can't really grow more wheat. I can change rotation slightly. But obviously, then you lose other crops like the beans and the proteins. And remember as well, Florian, you say that impact of the milling wheat on the food chain. When we're growing animal feeds, the feed wheat is being fed to chickens, cattle and livestock, which is then obviously ultimately all ending up in the supermarket. There is some, there's this pool of wheat being used for for ethanol production, for instance, which may buffer the oil and gas prices, there may be more demand from those sectors. But predominantly, it does end up on a supermarket shelf in one shape or form, even if it's not as a loaf of bread.
But we already run a low input kind of system, which to some extent, the timing of that is great for us, we've been running like a kind of a no tillage, regenerative conservation ag system, which uses a lot less cultivation, which uses a lot less fuel, because obviously, the two key input prices that are really impacting me at the moment, and will do over the next year or two, I'm sure is the nitrogen price and the fuel price. They're my two major input classes. So being really connected to how those prices are moving, you know - information is important. I'll sit here with like, you know, a second screen set up, which has got kind of price information on it like some kind of city trader at the time, rather than a farmer these days. Because the movement in those prices really matter.
I think there's more potential for farmers to produce the same but using less input. So I've learned that you can get the same kind of yields whilst using less nitrogen fertiliser and less fuel - that's within the power of most farmers to be able to do and achieve quite quickly. And I think the urgency and the push towards doing that has never been greater. It's been easy in the past to not need to bother because fuel’s cheap enough, synthetic fertiliser’s cheap enough, why change what's not broken kind of thing. But now all of a sudden, I think there's going to be huge incentive to really reduce the amount of cultivation you're doing, if any at all, and to try and find ways of reducing your synthetic nitrogen use whilst maintaining output. But there's not a lot we can do to improve output. I'd say most farmers are already trying to do that anyway, and have been that's just been sound business since forever, really.
Florian Ritzmann: So we've got a limited amount of land, we can't grow endless amounts of wheat. Now, with the wheat prices being where they are, you said £300 to 315 pounds per tonne. I think it's a good time to hand over to Rob Daykin, who owns Rob Daykin Partnership.
But before I ask you about the impact of wheat prices on your sector, can you tell us a bit about what you do in your business life?
Rob Daykin: Daykin Partnership was probably born out of 35 years + involvement in agriculture, and right across agriculture, from managing large arable farms and large farms and estates in the Midlands to senior roles in feed companies. So we provide consultancy and supply options and we work on a multi-partner basis. We work with livestock farmers, we work with other consultancy businesses who require specific knowledge, or data that we may carry. But we also work with manufacturers and traders as far afield as Colombia. We do some work in Hungary, in Denmark, and I've worked in Europe considerably over the years.
We also work both directly and indirectly with probably the UK’s largest milk buyers. And so the core of the business is, you know, it’ very much centred around livestock feed. My skill set probably lies within organic milk. I also write for the Feed Compounder and for Organic Farmers and Growers in their newsletter, but the multi partner approach gives us access to specialists across the whole supply chain and the whole livestock production industry. So in brief, that's what we do.
Florian Ritzmann: You’re well qualified to help me with this next question, then. I have a quote here from the head of the National Pig Association, the NPA, from a press release that I picked up on the 10th of March. Today is the 16th of March, so less than a week ago. The bit that stood out to me was this: “we are staring down the barrel of a total collapse of the British pig industry” and that kind of made me scratch my head because the last time I went into the supermarket, bacon was on the shelves as a consumer you don't feel the obvious strain that is embedded in that quote.
So I'm half guessing here that this must be a lot to do with the grain prices that we've just spoken about. Could you perhaps shed some light here?
“The UK is dropping between 2.5 and 3% per month in terms of milk yield. Ireland probably about 2%. And that’s driven by by farmers pulling back on on the amount of feed with the milk price / feed price ratio.”
Rob Daykin: I was listening quite intently to what Clive was saying there. And I want to pick up on it. A couple of points, which I think are relevant to livestock. The difficulty with livestock is we are a price taker rather than a price maker. So Clive there spoke about being at trader as well as a farmer, so he can operate in a market that's moving, whereas most livestock products, particularly dairy, would be based on a fixed price, on a contract price with a dairy company.
The dairy industry doesn't have that luxury of markets moving at one end of their scale, but they have the disadvantage of Clive's market moving; we're going to pay £80 a tonne more, whether you're a dairy farmer, whether you're a pig farmer, whether you're a poultry farmer, this is incredibly hard to swallow. So right across the industry, I think we're suffering from high costs. And a lot of it stems from further back probably than the Ukraine. If you look at, you know, input costs through 2020 and 2021 were on a constant rise. So soya, maïze, cereals, rape, everything was pushing forward.
And those additional costs, picking up on what what Clive said, you talked about nitrogen and the milling wheat, I would look at those as ‘marginal litres’: does the feed / price milk price ratio allow me to feed extra feed to take those extra litres. And at this point, that system’s broken. That's why we've seen a decrease in milk yields. The UK is dropping between 2.5 and 3% per month in terms of milk yield. Ireland probably about 2%. And that's driven by by farmers pulling back on on the amount of feed with the milk price / feed price ratio.
But again, following up with with Clive's comment about feed wheat, and I absolutely 100% agree, whether it's milling wheat for bread, or whether it's feed feed wheat for livestock, it's still producing food for the food chain, which ends up in the supermarket. So whether that be milk, cheese, yogurt, pork or poultry,
Florian Ritzmann: Supermarkets, that's the word I was hoping you'd say, Clive has the ability - he's a trader right now more than a farmer, and that is good and bad. And when the market is down, certainly he probably feels hostage to world prices. Going back to livestock, supermarkets seem to be almost the key here, in that it seems to be impossible for a livestock farmer to say: my grain costs £80 a tonne more, I'm just going to pass that on.
Why is that? Why is it that as a pig farmer who pays X to raise a pig or a cow or any other animal or it costs X to make a litre of milk - why is it so hard to pass these price increases on to the supermarket and essentially to the consumer. We are supposed to be in a market economy. Why is it so hard in these sectors?
“If you’re producing meat, or you’re producing milk - if we if we again look at milk: the cows milk twice a day, that milk has got to leave the farm. It has to leave the farm every day. There’s no storage capacity. We can’t pop it in the shed and think actually, the milk price looks great for August. Let’s sell our milk in August. ”
Rob Daykin: I think the fundamental difference between the two systems is Clive's got a product which you can put in a shed and he sells it whenever he wants. Whereas if you're producing meat, or you’re producing milk - if we again look at milk: the cows milk twice a day, that milk has got to leave the farm. It has to leave the farm every day. There's no storage capacity. We can't pop it in the shed and think actually, the milk price looks great for August. Let's sell our milk in August.
Whereas in Clive’s situation he can look at the screens he talks about and say yeah, I can see wheat’s a really good sell for November. I'm going to carry my wheat to November whereas as a livestock farmer in most situations, you haven't got that luxury, whether it's poultry, whether it's eggs, whether it's pork, once those animals are ready to go into the food chain they've got to go or they go over spec, they get too heavy, you know, down-graded on, and the price drops with them.
The pig industry wouldn't be my real strong area but I did talk to some people prior to this morning and they're planning for the pig industry in the UK, for the national herd to be 25% smaller. So I asked them what that meant, and the numbers that they gave me is that we'll see the sow numbers drop from 440,000 to possibly 380,000, even as low as 360,000. So that impact will then be passed back not in the short term, but in the long term. that will then impact Clive’s business.
“I did talk to some people prior to this morning and they’re planning for the pig industry in the UK, the national herd, to be 25% smaller.”
Florian Ritzmann: By reducing the need for feed, I get it. So just taking stock for a minute, we started out by saying that there's a national debate now on food security and our dependency on imports. But there are events that predate this war, which seems to suggest that this year, and you know, compounded by the war, agriculture, at least in some sectors is contracting. And when it comes to Clive’s, business, there is some room to shift things, to shift the furniture around, but you can't suddenly double your wheat output, unless it's at the expense of something else. So, back to the discussion. I'd like to introduce Mike Soulsby. Mike owns a food trade company called GB seasons. Can you first of all, tell us a bit about that and what you specialise in?
Mike Soulsby: Yeah, sure. Thanks, Florian. So GB Seasons is a UK company that specialises in the export of British fresh produce. So I've worked in sort of international fresh produce, trading for almost sort of 15 years or so now. And I spent a lot of time in South America trading produce into Asia and sort of been back in this country a few years. And GB Seasons is looking at the opportunities here, for export of fresh fruit and fruits and vegetables that we grow, which is kind of a fairly niche area in the sense that, you know, historically, we've not really looked too much overseas for opportunities for the products or projects that we grow in this country, given the obviously strong domestic demand that we have. So it's focused on certain product lines, where there are kind of niche demands at the moment, one of which is strawberries into markets like Japan, and then some over the winter months, we do some some potato export as well. So yeah, that's where my focus is.
Florian Ritzmann: I know that your specialty is exports, so we're just going to have to test your knowledge here on the on the domestic market as well. The first question is: people are talking about food and food price inflation. Are consumers yet, from what you can see from the world prices that you'll be quoted, where are we heading? In terms of food price inflation? Have you seen the tip yet? Or is the worst yet to come?
“In fresh produce, which is the area that I specialise in, you’ve got certain lines out there, for example, several major retailers take a 500 gramme punnet of grapes, that’s a £2 price point. It’s almost like that’s the magic number that they feel they can’t go above or they’ll lose volume on that line. That £2 price point has to increase. You’ve got to break through those thresholds, because you’ve got pressures in terms of inputs running right through the supply chain. That’s not just at the grower level. That’s also true for the bits in the middle, it’s international shipping, it’s transport, it’s packaging, it’s all the other inputs beyond actually just the farm and and cultivation of these crops that is pushing that necessity for a higher consumer price point. ”
Mike Soulsby: I think it's a really interesting question. From where I see it, there's there's always going to be a lag between pressures on input prices, and the chaos that events like the recent war are causing in the markets, filtering through to prices at the retail level, especially in this country, where we have a retail landscape that is extremely powerful, and which wields significant purchasing power over the supply chain. So retailers have to start listening to the demands of traders and growers in this country and lift those price points. In fresh produce, which is the area that I specialise in, you've got certain lines out there, for example, several major retailers take a 500 gramme punnet of grapes, that’s a £2 price point. It's almost like that's the magic number that they feel they can't go above or they'll lose volume on that line. That £2 price point has to increase. You’ve got to break through those thresholds, because you've got pressures in terms of inputs running right through the supply chain. That's not just at the grower level. That's also true for the bits in the middle, it's international shipping, it’s transport, it's packaging, it's all the other inputs beyond actually just the farm and and cultivation of these crops that is pushing that necessity for a higher consumer price point. And yeah, I think the Ukraine will have an interesting effect because there is a little bit of a double edge to this in that you've got a fairly important market in Russia that is effectively closed for global imports from one week to the next. So you’ve got fresh produce that's on the water, you got fresh produce that will be harvested over the next next few months that would be destined normally in a normal year to those markets, that now has to go somewhere else. So on some product lines, you're going to see actually a downward pressure on prices in the spot market, because you've got more volume hitting other major European markets. So for example, South Africa have just about kicked off their citrus season, they'd normally expect to send 10-20% of their total crop to to Russia, that will end up in Europe. That will end up in in Germany, France, UK. So you're going to have traders out there, that are expecting some good deals on some product lines like that. At the same time, you got growers pushing back and saying, Look, my costs are higher. So where it's all going to quite end up, we'll have to wait and see.
Florian Ritzmann: I was listening to the Today programme on BBC Radio 4 last week, on the 11th. The NFU President Minette Batters was on, the topic of the conversation similarly around price inflation. And she said, we are already seeing massive contractions in the protective crop sector, like aubergines and and peppers. So everything that's grown in a glass house, because 50% of their cost is reliant on the price of gas. So going back to the original argument, this all started way before that war. I guess the question is, if we want to keep eating aubergines, less will be grown in the UK because it's too expensive - we will need to import them, which is kind of at odds with the idea of self sufficiency. Is that a correct interpretation of what might happen?
“...then you’ve got this drive on the part of the government to to promote exports, post Brexit, there’s a big wide world out there, let’s get our products out there. But at the same time, you’ve got all of these supply side pressures...such as picking costs and labour””
Mike Soulsby: Yeah, there are a lot of contradictions in this and competing forces. So you've got, as you say, glasshouse production in this country on products like that, on tomatoes, on strawberries, as well, where the cost of gas has a huge impact. And therefore you're going to get to a point where yeah, it will be cheaper to either import or just do without and go to substitute products. It's a very interesting one, because that the government, in my sector on export, you know, we come back to the issue around food security in this country: to have genuine food security, you need export lines, I believe, because you've got to have that outlet for you know, percentages of crops that don't hit the specs for the domestic market, you want to have that diversity in sales that an export portion gives you. Big growing nations like the USA, Australia, New Zealand, they all have a percentage of fresh produce lines that go for export, you have American strawberries that end up in in Asia. New Zealand apples and so forth. So then you've got this drive on the part of the government to to promote exports, post Brexit, there's a big wide world out there, let's get our products out there. But at the same time, you've got all of these supply side pressures that in instances like gas prices, I think the government probably is limited in what they can actually do to intervene. There are other significant costs to growing, such as picking costs and labour where they can intervene, probably and make more of a difference around seasonal workers schemes and so forth. So it's a question of how far do we want to go with food security? How serious are we about that? How far, how much do we want to respect the free market and global price trends for things like fertilisers, other inputs, like the gas price, quite where is the balance really? And as you say, do we leave it more to the to the open markets whereby we're probably going to end up importing more of our fresh produce compared to where we were a few years ago.
Florian Ritzmann: I’d like to pull this all together. Now, again, I was listening to the BBC Radio 4 Today programme - now you know what I do in the morning. This was just this week, I was listening to Ronald Kers, who is the CEO of the 2 Sisters food group who produce a lot of food for the supermarkets, under their own brand. And he said in the conversation, we need to become self sufficient and less dependent on imports. Now from everything I've heard, that seems to be the main paradox. It sounds like we can achieve a higher degree of self sufficiency. I don't think any country is self sufficient - we can't grow asparagus in February. But in order to do that, we have to accept huge price increases, we have to remove the choke points that currently we seem to have identified sitting at the retail end and that says no, we have to have something priced at this particular price point. Otherwise it's not viable for us. Is that correct? And let's start with Rob. There is food security, something that can be achieved, but at a high cost that the government is not really willing to entertain.
Rob Daykin: It's really complex. And and I think, to go down that food security route, you almost need a fundamental reboot of the nation's tastes. I think we're accustomed to different products for 12 months out of the year. You mentioned asparagus, you can talk about avocados, you can talk about raspberries, strawberries, across the board, so you need it, you need to change the complete habit of a nation of shoppers as well.. I think the other thing, which is the big point that we've got to sort of throw into this is if you look at the world population today is about 9.7 billion by 2050, we'll be touching close to 10 billion people. So where does that fit into the question of food security? You know, how are we going to be able to feed that number of people with the systems that we've got, you know, we've been papering over the cracks for a long time. And I think what the Ukraine’s done, it's really opened the cracks up of how fickle and how dangerous the food supply chain is, and can be.
Florian Ritzmann: Clive, how about you. You’re a regenerative farmer. Taking care of the land is probably as much your objective as is growing good quality food, How viable is a strategy whose aim is to achieve food security?. And I'm asking that from the point of view of a previous podcast, where another arable farmer said, essentially, the UK arable sector is not investable, you can invest in carbon farming, but we're simply not competitive enough to just invest in producing food. So what do you think would need to change in order to get to more food security? Or is it just a pipe dream?
“...the first problem I’ve got is I need a lot more capital to produce that same output. Now, not all farmers will have access to the capital, that is required to do that. The other thing that’s it’s done to my businesses, it’s that it has increased the risk, you know, the cost of sitting in this casino now, the gambling on growing the crop and hoping that the weather’s right, and that I manage to harvest it and that everything goes. Well, you know, if that goes wrong, I’m in a much bigger hole than I used to be because I’ve put a lot more at stake to get there. ”
Clive Bailye: It's really complicated, as Rob said, but I think if we're looking for any positives out of what is obviously a very terrible situation in the Ukraine, I think, actually, what may come out of this is it's bought this whole issue of food security, you know, to the top of the agenda a little bit, because it's not been considered by successive governments for long enough. Fundamentally, food is too cheap. But that's an easy thing to say, from a comfortable middle class background where I can afford to eat and don’t have to use food banks, because a lot of people in the UK are in food poverty, so it's easy to say that food’s too cheap and needs to be more expensive. That means a lot more people go without so it's a selfish attitude to take, true self sufficiency, I think is a bit of a pipe dream. You know, we live in a society where we expect to be able to eat, you know, not just seasonally and so a degree of imports will always be an important part of, of our diet. With my regenerative hat on, I think, over the last couple of decades, people are taking food too much for granted that they're not really considering the quality of their food, how nutritious it is, how it's been produced, what its impact on the environment is and all those things were were creeping into the agenda. I think people are becoming more aware of these. But it's very complicated government policy, Henry Dimbleby's National Food strategy has been recently published, it is well worth a read, it's a very interesting document that really does highlight how what we're eating and how we're producing and getting that food impacts every aspect of government spending and our society through education, to welfare, and to the kind of the budget that goes into the NHS mopping up some of the problems caused by eating the wrong food or too much of the wrong food or whatever. So it's a really complicated area. But Henry's report is the first thing I've seen actually does try to pull these things together and look at them in a joint method rather than all individually because it's all part of the same problem. And I think it's something we really are gonna have to solve going forward because as you quite rightly point out there, Florian, food production has been marginal at best in the UK for too long now. And it's something that we all need, you know. Everyone panicked when they couldn't buy toilet roll or fuel was short at the fuel pumps. Well, you know, I dread to think the panic that would be in society if suddenly the supermarket shelves weren't full, and genuinely I mean, short term - that's my concern right now. The business case at the moment, just a couple of numbers I did before today, the £300 a tonne of wheat that I'm selling right now and the nitrogen fertiliser, which is the kind of biggest single input that kind of impacts my output there and the value of that nitrogen fertiliser per tonne was less than a third of the tonne of wheat that I'm selling. Today I'd need to sell four tonnes of wheat at the November price of £250 pounds to buy one tonne of nitrogen fertiliser. So there's two things happen to my business right there and decisions I've got to make fairly soon. The first thing is for me to farm the same acreage of wheat and try and maintain my output next year is morally the right thing to do, you know. If everyone decides to stop farming, there's gonna be a lot of hungry people in the world. And that's going to be a big humanitarian disaster. But the first problem I've got is I need a lot more capital to produce that same output. Now, not all farmers will have access to the capital, that is required to do that. The other thing that's it's done to my businesses, it's that it has increased the risk, you know, the cost of sitting in this casino, now, the gambling on growing the crop and hoping that the weather's right, and that I manage to harvest it and that everything goes. Well, you know, if that goes wrong, I'm in a much bigger hole than I used to be because I've put a lot more at stake to get there. So I'm being asked to take a lot more risk to produce the same. And all this is against the background where my margins are actually reducing, despite those higher prices. With my business hat on, you can start to make a damn good case for fallowing the farm and not cropping at all and saying: Well, you know, we've got a couple of good years, let's sit back wait for the world to sort itself out, wait for gas and oil supplies and things to kind of sort themselves out but that's going to mean a lot of farmers start doing that, there's gonna be a lot of hungry people out there. Because it impacts through that chain. So I think this is the problem that the government needs to address fairly quickly. Yeah, really, I'm amazed. It's not bigger in the news right now, these decisions are going to be made in the next three or four months, and they're going to impact the next 18 months of global global food supply. So yeah, it's it's a dangerous situation right now. And actually, maybe this is Putin’s strategy almost. It's kind of like you win wars economically these days rather than with missiles. And, you know, as he thought this through and realised that 18 months down the line, there's going to be a lot of unrest in the world when people can't get the food that they want.
Florian Ritzmann: Do you have any particular view on what the government could do if self sufficiency was a core policy goal goal? Where should it focus?
“If we can develop robotics in fruit picking faster than anywhere else, globally, or at least within Europe, then we’re gonna get that competitive advantage that will help solve food security issues that will help make exports more viable, that will bring that price point down in the shops, you know, that’s a win win for everyone.”
Mike Soulsby: It's a really complicated question. And I don't envy the government. There's so many conflicting interests and issues to contemplate not just at a business, agricultural level, but also social issues around as was commented on, you know, price points for lower level income consumers who will then be priced out of healthier fresh local produce, potentially, and they're all very important factors to weigh up. So I think the one way I try and sort of rationalise things is just by taking a step back and looking at what are the win-wins for everyone here. And one of those, for example is on soft fruit, which, you know, is an industry in this country that I know a little bit about. The average soft fruit farmer, strawberry farm grower in this country, about 50% of their costs is labour, you know, picking cost. So, setting aside the politics of of the seasonal workers scheme, how many migrant labor pickers you allow in each year and so forth, there is one obvious alternative to pickers strawberry farm, and it's robotics and you know, there are companies out there and there is obviously an industry that is, is developing, but the UK has the expertise to develop that industry probably as fast as anywhere else in the world. You know, so maybe let's look at ways like that, let's look at alternatives like that. If we can develop robotics in fruit picking faster than anywhere else, globally, or at least within Europe, then we're gonna get that competitive advantage that will will help solve food security issues that will help make exports more viable, that will bring that price point down in the shops, you know, that’s a win win for everyone. It's not easy, it takes time. But let's throw a bit more resources at it.
Florian Ritzmann: Investing, up-armouring our technology, I think for the next podcast, I need to get Mr. Dyson on, that is right up Dyson Farming’s street. And I think that is probably something where government could make a big difference by creating incentives for investment in technology in this country. I think that has been done in other sectors, why not agriculture? Well, that's a great conclusion to this particular part. But I don't think I'd be doing Mother Earth a favour if I didn't, you know, come back to the thing that we come back on every podcast, which is - we talk about agriculture purely in economic terms, but, you know, there's soil, wind, water nature involved in it as well, in previous podcasts we seem to have discovered a consensus that this country is moving towards a more environmentally sustainable way of growing food. Carbon Farming was mentioned earlier in on this conversation. Now, I'm not going to go into too much detail. There are our previous podcasts if you want to know what that is, so please go go back to those. But what I'm wondering is, let's say the government is not as enlightened as we are around this table and decides that No, we're just going to, you know, throw all of our environmental incentives out, and we're going back to intensive cultivation, intensive farming to solve this problem of food security. I'd like to take your views, starting with Rob, what do you see in the market, are businesses gearing up to making food the way they used to,
“I still think we have to keep our keep our eye on the bigger prize. And and I think the bigger prize still is climate change. So we’ve still got to be working towards those numbers and reductions that were set out in the COP conference”
Rob Daykin: What's happening in the world and in the Ukraine is horrendous, but I still think we have to keep our keep our eye on the bigger prize. And and I think the bigger prize still is climate change. So we've still got to be working towards those numbers and reductions that were set out in the COP conference because I think that will be the biggest challenge, to feed in the 9 billion 10 billion people we talked about earlier, we still have to continue on down that road and look at this as as a hiccup along the way, but not take our eyes off of where we are really going. I picked up something in one of Clive’s tweets tweets where you think you put a figure, Clive for how much fuel you used stubble to stubble, which was 32 litres.
Clive Bailye: Yeah, what makes sense for the environment to me has always been driven by what makes sense to my business. I'm not some kind of eco warrior who set out to save the planet. Primarily I run the business and I'm trying to do what's most profitable, it just so happens that what I found is that what is environmentally sound actually seems to give me better margins and better profits. So fuel was a fantastic example really, we use four litres a hectare to establish a crop. Now there’s a no tillage type system we use smaller, much smaller horsepower tractors and move a lot less soil. When we were using heavy cultivation, which is much more typical of how most farmers grow cereals in the UK, we were using 32 litres per hectare on establishment. That's as much as we now use stubble to stubble, you know, including all our application passes and harvest and drying, everything basically. So huge savings now. When fuels was 50p you don’t put a massive amount of focus on that because fuel’s cheap enough, but when when you start talking about £1.21 a litre all of a sudden those savings are huge. You're looking at £150 an hour in fuel alone to run one of those large horsepower tractors. There was a farmer who was saying that his his quad truck was drinking 300 litres of fuel a day. And I did the calculation: I can establish 1000 acres of wheat with that fuel that you're using in just one day with that big high horsepower tractor.
Rob Daykin: I think in the past we've all been guilty of it as well. We've all cut wheat at 20 21% [moisture]. And wiped it through the dryer because diesel’s 40, 50, 55 pence a litre. The positives that will come out, it will challenge people to think outside the box, and that'll be across the board, whether it's livestock, or whether it's an arable farmer, everybody will have to think think differently.
Clive Bailye: Exactly. And I mean, also the carbon opportunities - selling ISO certified carbon has become another output for me. And so to turn my back on that and to suddenly say, well, that doesn't matter anymore, I don't need to sell it, would be foolish, really, it's another kind of product that we've kind of been able to develop and has a real value to us now as part of the system. So I don't really think that, you know, it's wise to automatically think that: Well, yeah, prices are higher. So we just need to absolute maximise production. I mean, my farming system isn't about lower output. I am aiming to produce as much as I can any, you know, but I'm just aiming to do it spending as little along the way as I can to produce those better margins. So yeah, it's the old thing - what makes sense business-wise does make sense to the environment and the two do work together.
Rob Daykin: The way you you spoke about Carbon there can that work in a livestock system, the same way it works in an arable system.
Clive Bailye: The whole carbon thing, which by no means I claim to be any kind of expert on - there are big opportunities, I think, coming in the livestock sector. It's much more complicated in a livestock system but it is possible, you know.Historically the narrative really has been you know, cows are bad, crops are good kind of thing. And actually, that's just a really dumbing down of a farm more complex argument. Grassland is some of the best carbon sequestering stores that we've got. So it I think the livestock market for carbon will come. It's just the commercial side of that market, which has done the logical thing and tackled the easiest markets first, which is arable.
Florian Ritzmann: So it sounds like you guys are not seeing a return to intensive agriculture. We have established pretty strongly that there are some other fundamental problems to be resolved in UK agriculture first.
Clive Bailye: One of the issues you've got Florian right now is obviously government policy has been gearing towards taking some land out of production, you know, re-wilding land and that kind of thing. Well, again, with what's going on - if there's a humanitarian food crisis globally, re-wilding lands, which obviously benefits the environment, morally stinks if it's at the cost of people starving.And yeah, some big challenges going forward as to where you draw those lines between protecting human beings and protecting the environment.
Rob Daykin: I think that also applies to the biofuels as well, doesn't it? Yeah, I think that the maize, which goes into biofuel.I was sat in a conference yesterday about palm oil, and 50% of the palm oil that comes into Europe goes into into ethanol, or into fuel production. And where we see huge swaths swaths of the country used for digesters - you've opened a real can of worms Florian - where this can end up because we shouldn’t be putting food crops into digestors for energy.
Florian Ritzmann: I'd like to close off with a view from from Mike really on the food crisis, since he's closest to the consumer, really. Food prices are going to go up, we just heard that if we're gonna stick with our qualitative agricultural approach, but consumers are going to, perhaps grab products that the least expensive on the shelf. If prices go up on the shelf, what's the likely consumer response?
Mike Soulsby: Yeah, I think you get you're going to get a shift in consumer preference. So let's say, we’re assuming that across the board, you will have an increase across a whole range of fresh produce and other foodstuffs. Consumers will then start to substitute, you know, and a pallet of blueberries becomes too expensive for them they may apples intead. People still need to eat, it'll be a mixing and matching, you know, and you might have certain products that will where demand will drop because that just simply will be out of people's reach, that those price points will be too too far beyond their means. And other products may be more staple goods that will perhaps pick up in demand, I think that there'll be a just a general sort of wash up really of as to how, how the average consumer goes into store and what they're putting in their basket. But ultimately, yeah, across the board, you you can expect change and increases in prices. And that's both on imported produce, and also domestically produced, because everyone, you know, one thing we should remember on his is that we're not alone. These problems are not isolated to the UK, particularly around obviously, input costs, fertiliser costs, fuel prices, you know, the growers around the world are suffering, the same growers who produce and then export to the UK are suffering all these same challenges. So you know, we're kind of in it together. And it is really across the board that this is happening.
Florian Ritzmann: Well, I'd like to thank you all very much. The one thing that I would like to take away as a sort of preliminary conclusion is that perhaps the most exciting thing that could come out of his misery is a lot more investment in UK agriculture, on which I think everybody could benefit from the grower to the consumer, and which seems to be overdue. And yet on that note, thank you, Rob, Clive, Mike, thanks very much for joining. And, yeah, hopefully, we'll speak to you soon.
This was probably the most intense discussion we've had to date, probably because it was so immediate, and yet still, so surreal. We are talking about a war in Europe after all. Now, clearly, UK agriculture in its current state is not designed to cope with a war in Europe. And so this is serious. We need investment, we need leadership. And we need a plan that is both short term and long term, and which helps the farmer as much as it does the consumer.
And at the same time, though, I'm quite reassured we built FutureFarm because we believed back then that the market was not working well enough for farmers, farmers need more competition, they need more choice, they need more transparency when it comes to the inputs the buy, and the output they sell. On either side of that equation today we see massive businesses that take the farmers margin, and none of that risk.
Now, our platform is there to make the job of growing food more profitable, and that mission feels more right than ever. This was the FutureFarm podcast. Until next time, I’m Florian.
