It seems to me, and of course this is only an opinion with which others are quite free to disagree, that as an industry we have got ourselves – or rather others (and circumstances) have got us – into a right muddle. A muddle that, as time goes on, it becomes increasingly difficult to see a clear way out of. The saddest thing about it is the number of sheep producers out there who still seem to think that everything is going to be all right and that things will just carry on as normal (whatever that normal is) ad infinitum; ostriches and sand spring immediately to mind.
So what has led me to formulate this opinion? A host of things, but certainly not all to do with lockdown, although some issues arising from the current coronavirus situation have contributed to this mindset. The very threat of lockdown quickly highlighted the inherent fragility in both the food supply system and food security in the UK. Driven principally by the larger retailers, we have a food system with greatly extended and highly complex supply chains, where the national food warehouse is the motorway network of the UK and Europe; at any point in time, the majority of food stocks are in transit in the back of a lorry. It is a system that is incredibly vulnerable to disruption, this time due to Covid-19; it could easily have been, extreme weather conditions, industrial action, Brexit, etc - factors that are beyond our control but which have highlighted the symptoms of a failing system.
The current food system in the UK does a disservice to consumers and producers alike; it is a broken system, which needs to be addressed. As a country we cannot be self sufficient in foods, but we can move a long way towards greater self-sufficiency than the 55% to 60% position we are in now. With localised production, processing and distribution systems we can reduce the complexity and length of current supply chains, many of which are simply not sustainable in the long term, particularly if we as a country are going to achieve targets in reducing CO2 emissions.
Ruminant livestock has been an easy target for environmental campaigners, a band wagon that other interest groups have been keen to leap onto, but it has been the significant drop in road traffic that has generated the improvements in air quality during lockdown; sheep and cattle numbers have not significantly altered. It is a nonsense that a finished lamb sold through Ashford market in Kent could potentially be transported for slaughter and processing in, for example, Merthyr Tydfil, and then, potentially, be returned for sale in a supermarket within a mile of the market after a round trip in excess of 250 miles; that’s not good for the environment and not good for the sheep. It is ridiculous that in the South East, a relatively large sheep producing area, we have no volume abattoir capacity; it makes a mockery of local food for local markets.
A significant reappraisal of the whole food supply, distribution and associated infrastructure system is long overdue, a reappraisal that needs to be fully independent, beyond the control of large corporations that have led us by the nose into the current unsatisfactory situation. Professor Tim Lang’s Feeding Britain: Our Food Problems and How to Fix Them is a very good critique of the current system, a book that makes interesting, if not essential, reading for all involved in the food production system, something that as sheep producers we are all part of, although not fully recognised by some. It is a book that highlights many of the deficiencies within the current system, a book that in parts makes uncomfortable reading but does raise issues that the sheep sector cannot afford to ignore and, if we feel that they are unjustified, challenge.
Professor Lang’s understanding of livestock production does not, however, match his obvious extensive knowledge and deep insight into food security and policy issues, a deficiency highlighted by the statement that “cows have double stomachs and chew the cud: sheep, poultry and pigs do not.” This is a glaring error, but an error that should not be seized upon by those who are uncomfortable with some of his points as an excuse to dismiss the rest of the book.
One of the key points that Lang does make, and the most difficult to accept, is that as a nation we eat too much meat, red meat in particular, an argument based upon health, CO2 emissions, land use, water consumption and a number of other well-reasoned issues. This is, however, an argument that is gaining traction and will no doubt have an impact on the demand for the lamb and sheep meat that we produce, sadly at a time when there are other significant pressures on demand. Potentially the most damaging of which is the looming, final exit from the EU. We have now passed the time when we needed to apply for an extension to the withdrawal period in order to arrive at some sort of satisfactory trade deal before exit. The threat of a hard Brexit, although not 100% certain, is very much greater now than it has ever been, and with it comes a threat to the market for more than 30% of our lamb production. The impact of this may well hit us very much sooner than January 2021. Many of the large continental buyers will be looking to establish contracts for 2021 supplies of lamb this autumn; buyers who will not commit to contracts where the cost of lamb purchases may be adversely impacted by tariffs of uncertain levels after January 2021.
Negotiations for alternative markets post-Brexit don’t seem to be going too well either, with mixed messages coming from the current administration, on the one hand a commitment to maintaining welfare, environmental and food safety standards and on the other an apparent willingness to sacrifice it all in order to secure trade deals with the United States. At least now we have a promise of a Trade and Agriculture Commission, thanks largely to a tremendous effort from the NFU and support from the industry in pressurising government with a million-signature petition. No guarantees, but at least it is progress.
On the subject of which, and this will not be popular, there really is a very strong whiff (stench even) of hypocrisy from a lot of people, a significant number of sheep producers included, who seem to be of the view that we should be able to retain unrestricted access to EU markets for our lamb (a highly desirable position and understandable point of view), but don’t feel that we should have to accept any EU-imposed conditions while at the same time vehemently opposing unrestricted access without pre-conditions to agricultural produce from the United States. You can’t have your cake and eat it, as they say; we are really not in a very strong position to dictate terms.
Lack of demand will always have a negative impact on market prices; that’s simple economics. Where can we as producers look to make a margin? Even wool, not a significant contributor to margins but generally on the positive side, has been a disaster this year. British Wool has attracted a lot of criticism, largely completely unjustified. The dramatic fall (collapse) in wool prices is due entirely to a lack of demand; processing closures in China due to Covid-19 resulted, in February, in a complete shut down of the global market for cross bred wools. Even in Australia, average wool prices have fallen back by 36%, with some grades seeing a 57% drop.
The lack of demand has resulted in less than 20% clearance at some of this year’s wool auctions and British Wool carrying forward half a million bales of wool into the new shearing season. Recent sales (30 June) have seen an improvement, but without sales the Wool Board has no income, a situation not helped by the refusal of government to grant a business interruption loan on the grounds that British Wool is a public sector business, something that will come as quite a shock to wool producers who have for years been under the illusion that it is a producer-owned, self-funding, private business. This left British Wool, with virtually no income and no support from the government, with no option other than to slash wool prices at a producer level or simply run out of funds.
All of these issues have been further compounded this year, particularly for many producers in the South East, by the weather; a horribly wet winter and start to 2020, closely followed by an unseasonably hot and dry spring, has been disastrous for grass growth, leaving many producers short of grass at a time when most, in a normal season, would be expecting to capitalise on an abundance of grass from the spring flush, which this year simply did not materialise. Some producers, (myself included, for the first time ever) have even had to resort to some supplementary feeding, simply to prevent ewes losing too much condition and to keep lambs growing; all adding significantly to production costs in an already difficult year.
Between the middle of March and the end of June, I have recorded just short of 75mm of rain, compared with an average for the same time period of 117mm. The impacts will no doubt be felt for the rest of the year, with producers reporting a 30% to 50% reduction in yields of hay and silage. What we need now, something that arable producers do not want to hear, is a relatively wet summer to provide for a decent flush of grass going into the autumn to build ewe condition in preparation for tupping (doesn’t time fly when you’re having fun?).
Currently things are very much awry within the sheep sector. We are in a real muddle, but as I have said many times before, farmers, especially livestock farmers - and sheep producers in particular - are a remarkably resilient, adaptable and innovative lot, and most will find an appropriate way forward. But that resilience, adaptability and forward progress do necessitate being a little less ostrich like; recognising that there is a problem is the first step in addressing an issue. An old principal of mine, at one important meeting, replied in response to a question that “there are no problems only challenges” (very ostrich), to which my reply was: “If people perceive it as a problem then there is a problem; it is only when the problem is recognised that the challenge commences.” It’s time to start getting ourselves out of the muddle.