May 18 2013 Latest news:
Thursday, October 11, 2012
Consumers will be paying higher food prices as the impact of the poor harvest feeds through this winter – from bacon and eggs, to bread and jam, to potatoes and parsnips.
While East Anglia’s farmers have been relatively more fortunate than many across the country, the lack of sunshine and the miserable spring and summer depressed yields and quality of cereals and field vegetables. Added to the impact of severe drought across the United States and a heatwave in Russia, it has led to a global surge in the price of key feed grains for livestock.
The latest estimate of the UK harvest – still to be completed in parts of Scotland – is a 14.1pc fall in wheat yields, says the National Farmers’ Union.
While the cereal story was varied and Norfolk winter barley growers reaped probably the best quality for a generation, the NFU’s Guy Gagen said the average UK wheat yield was below seven tonnes per hectare.
“This is something not seen in the UK since the late 1980s.
The abnormally high rainfall across the UK since early summer has depressed wheat yield,” he added.
While fierce competition between retailers has managed to hold food price inflation in check, pressure is building throughout the system from farmgate to food manufacturer.
And because the depressing summer also hit crops across northern Europe, there is not the volume of surplus production, for example, of potatoes, that retailers can import.
As the drought in East Anglia turned into a wet summer, crops and wildlife all suffered from lack of sunlight and low temperatures.
It was also the worst year for potato blight in a decade or more, which will pose serious challenges as crops are loaded into store.
There will be many growers, crossing their fingers that their lower yielding crops, grown at huge expense, will be fit to be loaded out over the winter and spring.
Potato Council chairman Allan Stevenson has warned retailers and food service companies that the industry will need to recoup part of the £200 per tonne cost of growing crops.
“We urgently need some relief from price increases by retailers which can be shared by their supply chain,” he said.
For many, spray costs to control blight were twice last year’s levels and one leading Norfolk grower spent more than £50,000 just to control slugs to minimise crop damage.
In the field vegetable sector, West Norfolk specialist Simon Pearce, of Setchey, near King’s Lynn, who would normally handle about 70,000 tonnes of onions, parsnips and carrots, warned crop weight would be about 15pc down on last year.
There will be just enough vegetables to supply the domestic market this year, but there will be upward price pressure, he said.
In the livestock sector, pig and poultry producers have borne the brunt of sharp rises in feed grains as a result of global shortages – wheat topped £200 per tonne before easing slightly.
Another key ingredient for feed rations for pigs and dairy cattle, soya, also soared to about £450 a tonne before easing to below £400. A year ago, it was more than a third cheaper.
Award-winning East Anglian producer Jimmy Butler, of Blythburgh Free Range Pork, who runs 2,000 outdoor sows near Southwold, warned of looming shortages of pork and bacon by mid-summer as producers quit.
He said some farmers had been losing about £15 per finished pig because of higher feed prices.
And the lack of sunshine has also had an impact on average sugar yields as the latest annual beet campaign has swung into top gear.
A year ago, the average sugar content at British Sugar’s four factories was about 18pc – this week it was one per cent lower.
In an increasingly global food market, it does also illustrate that the weather really can make a massive difference as a total of 14.25 inches (362mm) of rain was recorded in June, July and August across large parts of the country.
The voice of supermarkets, the British Retail Consortium (BRC) has already warned of price “pressures” in the aftermath of global food shortages. Richard Dodd, of the BRC, said: “There certainly are price pressures in the system which are coming from poor wheat harvests in this country, but also in the other big wheat producing countries.
“The most recent figures are that wheat prices are up something like 29pc compared with a year ago.
“Our own figures for the shop price inflation for food show that it has been very, very stable – it has been 3.1pc for the last three months which is actually a two-year low.
“There is no food price explosion going on, but there are pressures in the system that will work through.
“Our fiercely competitive retail market is protecting customers from the worst effects of these price pressures.”
British Poultry Council chief executive Peter Bradnock said: “The costs of wheat, soyameal and corn –which are the key feed ingredients for the poultry industry and a number of other sectors – have increased significantly this year.
“For several months we have warned that British poultry producers are under real pressure from global factors and are pleased that the British Retail Consortium has accepted this will lead to a rise in shop prices.”
But there was reason for optimism for lamb producers. After a sustained period of gloom, lamb sales were on the up.
In the three months to September, volumes rose by 14pc with £131m being spent on the product, said industry trade body, Eblex.
The 12-week year-on-year increase coincided with a seven per cent fall in the average retail price of lamb to £8.35p a kilo.
Mike Whittemore, who is head of marketing for Eblex, said: “Volume lamb sales have been doing well since April, driven largely by greater supply.”