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2. Keeping up?

This year’s Oxford Farming Conference highlighted that much needs to be done in order that British agriculture does not fall further behind its global competitors. The AHDB Outlook Conference also highlighted a number of specific challenges faced by the British pig sector in an increasingly volatile and unpredictable market environment. The NFU launched a new campaign to place food and farming as a key issue in May’s General Election.

January and February is ‘conference season’ for British agriculture as it looks ahead to the challenges in the year ahead.

Longer term issues facing British farming were keenly debated at this year’s Oxford Farming Conference held in early January, which was attended by ‘great and the good’ of the farming industry.

A report commissioned by the conference sponsors highlighted ‘best practice’ within UK agriculture but also delivered as a ‘wake up call’ to British agriculture, if it is not fall behind its main global competitors.

The report entitled 'The Best British Farmers - what gives them the edge?' was prepared by The Andersons Centre and contained a number of key recommendations to boost UK agriculture’s competitiveness, including:

• Raising agricultural productivity
• Increasing research & development investment, especially ‘near market’ research
• Improving knowledge sharing
• Focusing on the top and middle sectors of farming
• Facilitating young farmer access to the industry
• Improving farmers’ business acumen

Danish farming and food were highlighted at several stages during the report and Denmark was among the highest ranked countries in ‘Agricultural Total Factor Productivity. Denmark is also cited as one of several countries which have a co-ordinated research and development infrastructure and ‘closer relationships’ between their farmers and levy bodies and development agencies. The report received significant media coverage, including The Economist

Agricultural productivity (from The Economist)

The Agricultural and Horticultural Development Board (AHDB) ‘Outlook Conference’ in February always provides an opportunity for the livestock sectors to review their prospects for the coming year.

BPEX reported that, despite declining pig prices, lower feed costs enabled UK producers to remain in profit during 2014. Many UK producers are now close to break-even – but most other EU producers have already fallen into a loss-making position.

Pig supplies will exceed demand for the foreseeable future, although it is possible that EU production may start to tail off in the latter half of 2015, if prices remain at current levels

The UK breeding herd will remain stable but continuing improvements in productivity will result in higher slaughterings in 2015. Carcase weights increased during 2014, on the basis of lower feed costs, but the increase in weights may slow during the coming year.

The premium for UK over EU prices remained at historically high levels during 2014 and was sustained by retailers’ commitment to ‘British’ post-‘Horsegate’.

Can the UK price premium be sustained?

BPEX highlighted a number of other ‘wild cards’, which may yet confound expectations for 2015….

• Continuing retailer commitment to ‘British’?
• Currency developments – if the € remains weak, this will make UK pig meat less competitive vs other EU supplies on global markets
• Feed prices currently remain at historically low levels but supplies are vulnerable to many unpredictable factors, such as the weather
• Pig disease risks may also impact the market – ASF is still spreading in a number of EU markets on the Russian borders and the more virulent strain of PEDv has been recorded in the Ukraine.

BPEX will be running marketing activity focusing on ‘traceability’ to coincide with the 2nd anniversary of ‘Horsegate’. The National Pig Association (NPA) have already launched a ‘Keep it up’ PR offensive to try and protect the British ‘premium’

Defending the price premium

The National Farmers Union (NFU), with the General Election in its sights, used the stage at its annual conference to launch its own manifesto ‘Great British Food gets my vote’, publishing a report – 'Backing British Farming - in a volatile world' – highlighting the risks of Britain’s declining self-sufficiency in basic foodstuffs.

Playing to the gallery, DEFRA Secretary, Liz Truss, gleefully proclaimed that DEFRA officials now started work each day, fortified with a British (not Danish!) bacon sandwich.

NFU Election Manifesto