Weather hits summer harvest

This summer's harvest in the UK has been hit by poor weather.  After a sodden autumn, a winter that was warm and wet and an exceptionally dry spring the recent period has seen a mini heat wave which stopped any more growth.  This was then followed by torrential rain which flooded fields and flattened crops.  It is also needs to be borne in mind that there was a reduced planting area last autumn.

The NFU has claimed that it will be the worst harvest in 30 years.   The ADHB were more optimistic, forecasting an average decline in yields of 10 per cent.   In any event it looks like the UK will be a net importer of wheat, around four million tonnes.  Wheat production is expected to be below 10 million tonnes, well below the five year average of 15 million tonnes.

Farmers will not be compensated for lower yields by higher prices as there are plentiful supplies of wheat and maize elsewhere.  There have been strong yields in Russia's central and Volga regions.

As weather conditions become hotter and wetter in response to climate change, farmers are turning to alternative crops such as soya and maize.  Soya is a legume native to south-east Asia.  It is mostly used as an animal feed.  Rising meat consumption by the Chinese middle class has driven up its use.  China imports 105 million tonnes of soya a year.   

Some 5,500 acres are currently being cultivated by around 150 farms and that is expected to increase to 10,000 acres next year.  It is open to question whether there are varieties that will do sufficiently well in the UK climate.

The answer no longer lies in the soil

The Covid-19 pandemic has given a big boost to advocates of vertical farming because of the simplicity of its supply chain.  Vertical farming is the practice of growing crops in stacked layers without solar light.   It can be housed in buildings, shipping containers, underground tunnels and even abandoned mine shafts.  Vertical farms use soil-free growing techniques and stack crops in specially designed beds and trays.

The technology

It makes use of LED lighting to provide different wavelengths of light, according to crop and growth stage need.  The sector received a boost from advances in LED lighting.  The lights can be used to change the way plants grow, when they flower, and how they taste.

The LED lights can be positioned between plants and produce hardly any heat radiation.

The benefits

Advocates say that vertical farming offers a means of guaranteeing yields and reducing the industry's environmental impact while improving the supply of safe, healthy and nutritious food.   There is lower water and nutrient use.

Crops can be grown year round with minimal human intervention.   It can be run entirely on robotics.  This is an important consideration when reliable labour is scarce and its cost is rising.

There is a reduced need for transport and a reduction in food waste because crops are of a more uniform quality.  Reduced fertiliser use means reduced greenhouse gas emissions.

Downsides

In a field, the sun comes free.  Vertical farms are energy intensive and have high electricity bills,   However, there are improvements under way in LED lighting.

It also requires a high initial capital investment and the sector has been littered with bankruptcies.

It is only suitable for a limited range of crops.   It makes sense to grow high margin crops.  Examples are leafy greens, baby leaves like pak choi and herbs such as basil.  It is of no use for staple commodities like bulk grains or cereals.

The sector

Worldwide it was worth £1.72bn in 2018 but is predicted to rise to £9.84bn by 2026.   Japan and the United States have been leading the way.

Intelligent Growth Solutions have a demonstration farm near Dundee.  The company raised £7m from three venture capital firms and the Scottish Investment Bank.   They sold their first vertical farm in July to an Aberdeenshire venture backed by a founder of craft brew business BeerDog

Ocado has invested £17m in the sector.  It has a joint venture with US firm 32ha and Priva Holdings in the Netherlands known as Infinite Acres.  It has also taken a 58 per cent stake in Lincolnshire's Jones Food Company.

In London Growing Underground provides microgreens and salad greens beneath the streets of Clapham.

Advocates argue that vertical farming is disruptive in the true sense of the word as it is changing conceptions of what the food system should be like.

Potato growers have had their chips

Once it would have been down to government to help out a sector in trouble.  However, with the UK's €1bn potato growing sector hit hard by extreme weather and Covid-19 it is their largest customer, McCain, that has stepped up to the plate.

It is worth noting that potato production (other than for starch) was always outside the CAP and therefore much more influenced by supply and demand.

The closure of restaurants and fast food outlets left a potato surplus of almost 200,000 tonnes in March, putting a downward pressure on prices.  Prior to lockdown prices of £200 to £300 a tonne could be achieved, but they then slipped back to £100 to £150 a tonne.

The hardest hit growers have been those who sell on the spot market, such as those selling for 'fresh chipping' at food outlets.

McCain buys 15 per cent of the UK potato crop, normally on one year contracts.  It is now going to offer three to five year contracts.  It also offering grants for investment in harvesting capacity, including technology such as irrigation and harvesters that can handle very wet weather.  85 growers have applied for these grants.

Recent poor harvests have been among the worst in four decades after drought in 2018 and floods in 2019,   McCain thinks this is down to climate change.  They consider they have to act to build a sustainable supply chain.

Hard cheese on trade deal

Britain's trade deal with Japan has been thwarted for the time being by a disagreement over the tariff on stilton cheese, exports of which to Japan are worth just £102,000 a year.   A milder form of the cheese is made for Asian markets.

Under the existing EU deal with Japan, Japanese tariffs of 29 per cent on hard cheeses such as cheddar will be phased out by 2033.  For other cheeses such as stilton only a quota of exports would be tariff free.

International trade secretary Liz Truss wanted to demonstrate that the UK could get a better trade deal under Brexit than that agreed with the EU, even if the gain was a small one in economic terms.

In 2014 she made a speech to the Conservative Party conference claiming that the fact that Britain imported two-thirds of its cheese was a 'disgrace'.