This out of the UK. Serious food inflation and shortages beginning to emerge. Unfathomable in a developed economy? Think again folks.
--------------------------------------------------- Fill your freezer: a vegetable drought could be on its way Monday, 30th July 2007 DAN BUGLASS ([email protected])
NO RAIN, certainly in the Lothians and Borders, for three full days makes for a welcome change, and I even saw a lot of farmers with smiling faces when I visited the Border Union Show in Kelso on Saturday.
Travelling down from Edinburgh with someone else at the wheel presented the opportunity to survey the countryside and I have to report that in that part of the world the crops, especially wheat, looked well and there were also signs of a start being made to harvesting winter barley.
Weather permitting, this year's harvest will be the most rewarding for arable farmers for several years, with the price of wheat jumping by an unprecedented £10 in a single day last week.
Truth to tell, farmers are not really sure what they will receive for their grain with world supplies on a knife-edge. Floods in England as well as in parts of France and Germany together with extreme drought conditions in eastern Europe are making forecasting a difficult business.
Walking around Springwood Park on Saturday, surely one of the most attractive and well-appointed showgrounds anywhere (see results below), several farmers told me they had sold some grain on forward contracts as well has waiting to play the spot market.
That is probably a wise course of action. However, what I have been discovering over the past two weeks in the wake of the English monsoon season is that the general public is waking up to the fact that it is no longer safe to take future food supplies for granted. I was reliably informed that a large Tesco store in south Wales one day last week had absolutely no fresh vegetables, other than potatoes, on its shelves. There are reports of the price of broccoli having quadrupled in the past ten days. There will be more of this as winter approaches - and we should not be surprised if even a can of soup is appreciably more expensive before too long.
The government may have a decent grip on the economy for the present. However, very little has been heard of food inflation. The International Monetary Fund recently reported that food prices on a global basis had risen by 23 per cent over the past 18 months. Here in the UK it is now reckoned that food inflation has been running at close to 5 per cent. Sure, the average household spends little more than 10 per cent of its disposable income on food, but I am certain that will rise appreciably and that panic buying may ensue.
One piece of advice I heard on Saturday from an industry sage to a farmer's wife was that she should buy a new deep freeze and stuff it to the brim with frozen vegetables. All rather reminiscent of rationing in the post-war era.
If the mood at Kelso among the arable fraternity was distinctly upbeat, the same could not be said for beef and sheep producers, who are suffering from low prices. True, the price of prime cattle has firmed considerably over the past ten days, but it is still not enough to ensure a profit from expensively acquired store animals in the spring.
I also bumped into Basil Lowman, now officially retired from the Scottish Agricultural College, but still working as hard as ever in a consultancy role. I have had many a banter with Basil over the years and I remember taking issue with him at the time of the reforms of the Common Agricultural Policy (CAP) , which took effect in January 2005.
He predicted then that up to 30 per cent of the beef cows and 20 per cent of the dairy herd would disappear in a few years because they would not make a profit without direct support. I thought that was overly pessimistic at the time, but now I am less sure.
Most farmers in the wake of CAP reform made little change to their practices but I came home on Saturday with the impression that things are about to alter in the countryside, especially in the hills and uplands - fewer cows and less sheep is the prediction.
But then again, if returns improve, who can tell what will happen?
