Sharp fall in lamb prices

Coronavirus has seen lamb prices fall by as much as 25 per cent, although there has been a steadying of prices. However, the 30,000 lambs sold last week was a fifth of the level normally sold at this time of year.

Sales of meat to restaurants and fast food outlets disappeared along with large parts of the export market that takes 25 per cent of UK production. The Rungis food wholesale market near Paris which deals with a large portion of the UK export trade is shut.

Rerouting meat to retailers is not easy as processors used to dealing with the food service industry lack the equipment to cut and package meat for retail. In any case, consumers are switching to cheaper meats such as chicken. Meat intended for more expensive cuts is being used for mince.

The National Sheep Association has called for deficiency payments to make up the gap between a baseline price and the market price. However, the budgetary cost of this policy instrument is always unpredictable.

Some have argued that the disruption to supply chains will give a higher priority to food security as many farmers would wish. However, attention is likely to focus on logistics rather than the point of production.

The sheep industry was already in poor shape before the virus struck. Many farmers also fear a no deal Brexit which could lead to the imposition of tariff barriers on their exports to European markets.

Could Dom's deal be bad for UK farmers?

The Foreign Secretary, the Rt. Hon. Dominic Raab is visiting Australia today and tomorrow: Foreign Office statement

A free trade agreement with Australia has received much less attention than one with the United States in terms of its impact on agriculture, but it could actually be greater. My concerns in the past have focused on exports on lamb and cheese, but I may have been focusing on the wrong target.

According to Wake up to Money on Radio 5 this morning, Australia is interested in beef exports, including hormone reared beef (which concerns me more than chlorinated chicken, although that is bad enough).

The writer visits an irrigation area in New South Wales

This figures as some years ago I was given a study tour by the Department of Agriculture in Australia. We visited a huge dry lot beef farm where our guide kept referring to the 'beasts'. No doubt they were properly looked after, but I don't think animal welfare activists would like what I saw. The entire output was going to Japan, but some of it could easily be sent to the UK.

I also visited a wine production area which relied heavily on irrigation (with consequent impacts on the Murray-Darling system). Australia is also interested in more access for its wines and claims that that could costs by £1 a bottle.

Much Australian wine is at the cheap end of the market (I have crossed the famous 'Jacobs Creek') although I have had some excellent wines from the Margaret River area of Western Australia. There is probably no real threat to the developing UK industry (I should declare that I am investor in Chapel Down in Tenterden, Kent).

It's livestock producers that should be concerned.'

Incidentally, according to The Times yesterday the Foreign Secretary is known in Whitehall as 'Dim Dom'. I am sure this is unfair, but I also know how tough and well-informed Australian negotiators can be.

Farm produce may have to be taxed

The Committee on Climate Change has recommended that consumers cut that consumption of beef, lamb and dairy products to combat global warming. If this does not happen, taxes on these products may be necessary: Unwelcome news for farmers

The NFU's response is here: Strong message on climate change

Recent severe weather events, with a higher incidence of droughts and flooding, appear to have enhanced farmers' awareness of climate change, as evidenced by an interesting survey conducted by Farmers Weekly: Cost of extreme weather.

On a visit to my brother-in-law's sheep farm last weekend I learnt that lambing at the 1,000 foot level now starts much earlier than it did in the past as the climate has warmed.

More than four out of five farmers said they are experiencing more frequent extreme weather events on their farm – ranging from severe drought and hot summers to flooding and intense rainfall at unexpected times of the year. Three-quarters of those questioned said it had cost them more than £50,000 – an average of more than £10,000 per year.

More than two-thirds of farmers believe the increase in extreme weather events seen over the past five years is due to climate change – but many believe it isn’t. Some 31% said they believed weather patterns were cyclical and had always changed over the years Many said weather patterns were natural and had little or nothing to do with mankind or the impact of human activity.

I have a family interest in the success of livestock farming, but it is smell the coffee time. Domestic consumption of red meat is likely to decline for health as well as environmental reasons. Given that the Committee on Climate Change thinks there needs to be more woodland, livestock farmers could be given incentives to plant trees - but no regimented conifer forests please.

Farmers back no deal Brexit

A surprising number of farmers back a no deal Brexit given that many of them would suffer financially as a result. At least that is the case if one believes polls from Farmers Weekly. A health warning is always necessary about these polls as respondents select themselves and the Ns are often small. A poll which purported to show that a majority of farmers backed Brexit in the referendum has nevertheless embedded itself in the public mind.

43 per cent of 'about 300' farmers said they would be happy with a no deal Brexit while 57 per cent said they would not. Concern about leaving without a deal was strongest in Northern Ireland, Scotland and Yorkshire and Humberside. Optimism about farm business prospects is at its lowest level since the survey started a year ago.

A snapshot 24 hour poll found that 53 per cent would choose to leave the EU with no deal if they could vote again. 38 per cent said they would vote remain and just 9 per cent said they would back the withdrawal agreement backed by Theresa May.

It is interesting that the first poll is below a story about the impact of a no deal Brexit on the sheepmeat sector. About one-third of the UK's production of lamb is exported and 95 per cent of this goes to the EU. 40 per cent tariffs and regulatory barriers would almost wipe out exports.

The Government has ruled out culling as a response to such a crisis. It looks as if they favour a combination of a headage payment on breeding ewes and a slaughterhouse premium. The UK breeding flock already reduced by about 30 per cent in the 2017-18 breeding season as farmers responded to an uncertain future.

Mike Gooding, director of Farmers' First, one of Britain's biggest lamb exporters, told Farmers Weekly: 'Essentially, Brexit risks excluding UK produce from the EU market. A no-deal Brexit would result in the same outcome - but with that risk greatly increased.'

He predicted a substantial fall in sheep farming in the UK. 'My own personal view is that there will be far fewer farmers managing what sheep there are in larger flocks - possibly across multiple holdings.'